A unilateral trade agreement is a trade agreement imposed by one nation with no regard for others. It benefits only one country. It is one-sided because other nations have no choice in this matter. It is not ready to negotiate. Critics of bilateral and regional approaches to trade liberalization have many additional arguments. They propose that these approaches undermine and supplant the MULTILATERAL approach of the WTO, which must be favoured for global use on a non-discriminatory basis, rather than supporting and complementing it. Therefore, the long-term outcome of bilateralism could be a deterioration of the global trading system into competing and discriminatory regional trading blocs, which could lead to additional complexity that complicates the flow of goods between countries. In addition, the reform of issues such as agricultural export subsidies cannot be effectively addressed at the bilateral or regional level. Some Conservatives define unilateral trade policy as the absence of a trade agreement.
In this definition, the United States would lift all tariffs, regulations and other trade restrictions. It is one-sided because it is not necessary for other nations to do the same. The argument is that the government should not restrict the rights of its citizens to trade around the world. For many countries, unilateral reforms are the only effective way to reduce barriers to internal trade. However, multilateral and bilateral approaches – removing trade barriers in coordination with other countries – have two advantages over unilateral approaches. First, the economic benefits of international trade will be strengthened and strengthened if many countries or regions agree to remove trade barriers. By expanding markets, concerted trade liberalization enhances competition and specialization between countries, increasing efficiency and consumer incomes. One of the challenges of the WTO system has been the maintenance and expansion of the liberal global trading system in recent years. Multilateral negotiations on trade liberalization are progressing very slowly and the need for consensus among the many WTO members limits the scope of trade reform agreements.
As Mike Moore, a new WTO Director General, said, the organization is like a car with an accelerator pedal and 140 hand brakes. While multilateral efforts have reduced tariffs on industrial products, they have been much less successful in liberalizing trade in agriculture, textiles and clothing, as well as in other sectors of international trade. Recent negotiations, such as the Doha Development Round, have been difficult and their ultimate success is uncertain. What is a unilateral trade agreement? It is simply a treaty that requires only the action or initiative of a state. Unilateral trade policies can be tariffs, or they can be preferential trade programs such as the U.S. GSP and be used as a strategy to promote economic growth in developing countries. Currently, WTO members are engaged in a round of multilateral negotiations known as the Doha Development Agenda. Negotiations are currently stagnating; the four main players in the food trade (Brazil, the EU, India and the United States) have held discussions but have not yet reached an agreement.