U.S. free trade agreements all rely on WTO rules and often repeat them in the agreement, although in a number of areas they go beyond WTO rules. The U.S. agreements have moved from a short and simple 1985 agreement with Israel to more complex and extensive agreements in recent times. On the other hand, trade in services is not done through customs offices. The way services can be exchanged is diverse and the potential barriers to this trade are very different. In general, the rules affecting trade in services are part of national rules that affect the provision or consumption of services, such as rules on banks, telecommunications or the supply of electricity or water, or rules on the protection of health or the environment. The rules of service may be imposed at the national or sub-national level or not by the government, but by an inter-professional organisation. Often, these rules have been constructed from a domestic policy perspective, regardless of the potential impact on foreign suppliers. Rules that may constitute barriers to trade in services are not necessarily discriminatory. For example, a rule limiting foreign exchange may not affect a local service provider, but it may deter foreign suppliers from supplying the market. On the other hand, discriminatory rules can have a very legitimate national justification.
For example, a central bank may impose stricter capital requirements on a branch of a foreign bank than on a domestic branch for good prudential reasons. As a result, the Negotiators of the Uruguay Round have developed the Trade-Related Investment Measures (TRIM) agreement, which essentially specifies Articles III and XI of the GATT, including a brief clear list of practices prohibited by these articles. Thus, the TRIMs agreement constitutes a clear violation of the rules under which an investor uses domestic products instead of imported products or must require a company to limit the use of imported products to the value of local exported products. Today, the United States has concluded free trade agreements with 20 countries, as shown in Table 1.1, and in February 2016, a major new agreement was signed with 11 other Asia-Pacific countries, the Trans-Pacific Partnership (TPP) Agreement. However, it is not clear at this stage whether this agreement can obtain congressional approval. In addition, the United States is negotiating an agreement with the European Union – the Transatlantic Trade and Investment Partnership (TTIP). However, if the TPP is not approved by Congress, the future of the TTIP negotiations will be called into question. The agreement prohibits subsidies that directly benefit exports and subsidies that promote the use of domestic content over imported products (“subsidies for local content”). Both categories of grants are subject to early dispute resolution. Even if the political will had been present, the results would have been minimal.
On the basis of the negotiations, developed countries would lump a lump sum reduce tariffs on non-agricultural goods by an agreed percentage.