Which of the following is an advantage of international trade agreements?

• A. They prevent any competition between domestic and foreign producers.
• B. They reduce barriers to trade, allowing countries to access a wider variety of goods and services.
• C. They guarantee that every country will have a trade surplus.
• D. They always eliminate all tariffs and quotas between member countries.

Answer: (B)

Verified step by step guidance

1. Understand the purpose of international trade agreements: they are designed to facilitate trade between countries by reducing or eliminating barriers such as tariffs, quotas, and import restrictions.
2. Recognize that international trade agreements do not prevent competition; rather, they often increase competition by allowing foreign producers to enter domestic markets more easily.
3. Know that trade surpluses or deficits depend on many factors like comparative advantage and economic conditions, so agreements do not guarantee a trade surplus for every country.
4. Be aware that while trade agreements aim to reduce tariffs and quotas, they do not always eliminate all of them completely; some barriers may remain depending on the agreement's terms.
5. Conclude that the main advantage of international trade agreements is that they reduce barriers to trade, enabling countries to access a wider variety of goods and services, which benefits consumers and producers alike.