Bilateral trade agreements play a vital role in the development of international trade which usually benefit all parties involved. Producers can find relatively high prices, and buyer can find better qualities within their budgets. The tough competition in the global economy forces all the economic agents to produce at the greatest efficiency with the highest productivity. Thus, according to the economic theory, a fair distribution of income and market mechanisms occur.
An Unexploited Trade Relation
Turkey and Uruguay are two important countries in the global economy, looking for new opportunities to maximize their benefits from free international trade. There is no political conflict between the two, and are willing to cooperate to advance their trade volumes.
The Uruguay economy has a quite similar structure and a similar story to the Turkish economy. At the beginning of the 2000s, both economies had severe economic and financial crises, and both countries received assistance from the International Monetary Fund (IMF) to restructure their banking systems. They all faced high inflation and dollarization and made great efforts to transform their economies from an agriculture-dominated economy to an industrial economy after 1990. Although they have many similarities, there are still some differences, such as creating a base for profitable trade between nations.
As the first step in attempting to develop trade relations, Uruguay established an embassy in Ankara, the Turkey capital. Following this move, Turkey and Uruguay agreed to meet in the summer of 2021 with the goal of signing a bilateral trade agreement. The first and foremost outcome of these meetings was that they planned to develop customs cooperation agreements signed by the countries. Officials from both countries therefore worked together to lay the groundwork for a bilateral trade agreement, and the two nations expect to reach their goal and boost trade volumes in a couple of years.
Although there are many examples of unintended consequences of free international trade, it is still one of the best options available to countries. However, countries sometimes tend to set limits on their international trade relations for economic or non-economic reasons. Limiting free international trade creates fewer opportunities for entrepreneurs, resulting in inefficiency.
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