International Trade of the United States

Several global and regional trade agreements help the United States carry out bilateral business with member countries under the complicated and ever-expanding body of primary law. Through the laws, the U.S. is a member state to certain international and treaties agreements, case laws in trade dispute settlement, and national legislation that oversee how it trades with other nations. Globally, the U.S. is part of the World Trade Organization (WTO), formerly known as the General Agreement on Tariffs and Trade (GATT) (Velut, 2018). WTO allows the U.S. and other nations to follow a particular mechanism for reviewing multilateral trade policies when undertaking business practices. Moreover, the associated trade agreements include rules on trade-related intellectual property between member states (Velut, 2018). One of the principal requirements of the trade agreement is that member states must follow a system that facilitates external parties’ review and evaluation of administrative decisions.

The other global trade arrangement where the U.S. is a member state is the International Monetary Fund. Currently, the organization comprises 189 member states, and the institution works to foster economic stability and growth through financing, advising, and providing policies (Velut, 2018). The organizations allow members states to access a pool of finances when they experience balance-of-payment challenges. Lastly, the U.S. is also a member partner of The World Bank, a global financial institution created in 1944 and offers countries loans for capital programs.

Regionally, the U.S. has free trade agreements (FTA) with twenty nations. The FTA is founded on WTO’s tenets, and many of its bilateral trade agreements depend on the country the U.S. partners with for trade. Examples of FTA are the Dominican Republic-Central America-United States Free Trade Agreement and the North American Free Trade Agreement (Velut, 2018). Another regional trade agreement for the U.S. is the Trade and Investment Framework Agreement (TIFA). The agreement offers a governmental framework that resolves and discusses issues attributed to investment and trade early (Velut, 2018). The agreements also serve as a platform for America to work with and identify capacity-building initiatives where deemed appropriate.

Factors contributing to a country’s desirability include factor endowments, trade policies, demand, exchange rates, inflation, foreign currency reserves, and trade balance as an economic indicator. Relative to factor endowment, a country’s workforce characteristic is considered capital, labor, and land (Stern, 2017). Therefore, the availability of natural resources plays a significant role in determining whether a country is desirable for trade. When trade policies are considered, the trade barriers that impact a nation’s imports and exports become a major indicator of its global competitiveness (Stern, 2017). The import duties and tariff restrictions may result in larger trade deficits making a country closed to open trade policies since free trade impediments may shut the nation out of export markets.

Exchange rates, inflation, and foreign currency reserves play a key role when determining a nation’s pressure to trade balance. Exchange rates are indicators of raised costs of exported goods and can leave exporters priced out of the international market (Stern, 2017). Foreign currency determines a country’s desirability by allowing access to imported machinery that improves productivity. If inflation runs rampant within a country, it becomes a gauge of a product’s price, which might be higher or lower than other nations (Stern, 2017). Demand for a specific service or product is necessary for global trade to occur, and lastly, trade balance as an economic indicator dictates a nation’s trade balance utility.


Stern, R. (2017). Balance of Payments: Theory and Economic Policy. Taylor and Francis.

Velut, J.-B. (2018). Understanding mega free trade agreements: New cross-regionalism’s political and economic governance. Routledge.

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DemoEssays. "International Trade of the United States." January 7, 2023.