Question

How do trade agreements of international organizations affect trade?

by incentivizing the development of trade policies
by eliminating tariffs and taxes on imports and exports
by encouraging countries to provide open access to trade
by helping smaller countries compete in the world market

Answer 1

All four are correct — trade agreements affect trade in each of those ways, though the extent varies by agreement:

- By incentivizing the development of trade policies: Agreements set rules and standards (e.g., tariff bindings, services rules, regulatory cooperation) that push countries to create compatible laws and institutions.
- By eliminating tariffs and taxes on imports and exports: Many agreements (free-trade areas, customs unions) reduce or remove tariffs among members and limit certain export taxes, increasing trade flows.
- By encouraging countries to provide open access to trade: Commitments in agreements lower non‑tariff barriers, ease market access, and promote liberalization.
- By helping smaller countries compete in the world market: Access to larger markets, rules-based dispute settlement, technical assistance and capacity‑building included in many agreements can strengthen small economies’ export opportunities.

Note: effects depend on the specific agreement, its scope, and how faithfully members implement it.