Article for translation What do trade agreements do?

The Trans-Pacific Partnership (TPP) is the biggest trade agreement signed to date, in terms of the combined economic activity of the countries involved. But there are more deals, many already in force and others in the negotiating pipeline, including one that's even bigger than TPP.

How many are there?

Countries are required to notify the World Trade Organization (WTO) when they conclude an agreement. As of February this year, a total of 625 have been notified (though you get smaller numbers if you count them differently.)

There are more in the pipeline, notably one involving the US and the EU, called the Trans-Atlantic Trade and Investment Partnership (TTIP). The negotiations have not been completed, but if they ever are it will be bigger than the TPP.

In addition there is a negotiation called the Trade in Services Agreement (TISA) between the EU and 22 countries. The US is involved and some emerging economies including Chile, Turkey and Pakistan.

What are these agreements intended to achieve?

To boost trade, and in the process boost economic activity, by reducing or even removing barriers to trade across international borders. Countries taking part are generally seeking improved opportunities for their businesses to sell their goods and services overseas. It is business groups who are the main supporters of these negotiations.

There are also often investment aspects to these deals which are intended to encourage more foreign investment between signatory countries.

What sort of trade barriers do they tackle?

They involve negotiating reduced tariffs, taxes that are applied only to imports. Sometimes the aim is to eliminate them on many items.

But they also try to reduce, to varying degrees, a wide range of other types of obstacle, called non-tariff barriers. For example, by:

• seeking to reduce the cost to business of complying with multiple regulations

• banning discrimination against foreign firms or limits on how much business they can do

• at least partly opening up government purchasing to bids by foreign business

• requiring countries to have at least a specified level of protection for intellectual property - patents and copyright

Some agreements also cover labour rights, for example requiring signatory countries to allow workers to organise and join unions and outlawing child and forced labour.

What about investment?

Many agreements have rules on how countries treat investors from other nations involved in the agreement. For instance:

• the host country may be required to treat the foreign investor as they would a local investor

• there may be a ban on imposing requirements to buy inputs locally

• the investor may be given the right to choose the nationality of top management

There are often restrictions on host governments "expropriating" an investment. Conventionally that means taking government ownership without compensation. But it can sometimes be interpreted quite widely, to include "indirect expropriation", which covers actions that reduce the value of a foreign investment. The tobacco company Philip Morris tried to argue that Australia's plain packaging laws were expropriating its investment, though it ultimately lost the case.

The investment aspect often also includes a provision for arbitration, known as investor-state dispute settlement (ISDS). In some cases these have led to governments having to pay compensation to a foreign investor over a change of government policy. The Philip Morris case against Australia was one of the most controversial to have made use of ISDS.