China has set up eleven free trade agreements, three more of which are under negotiation and three more are under consideration. Many of them are relatively small, although they are useful to businesses in the countries they have – Chile, Costa Rice, Iceland and Peru. The Pakistan deal is often cited in Sino-Pakistani bilateral relations, which are obviously strong, with Pakistan being the main beneficiary of Chinese out-of-country investment in Southeast Asia, while China also has an interesting free trade agreement with Switzerland, signed in the middle of last year and expected to enter into force later in 2014. In particular, Switzerland is not an EU member state, although it is a member of the European Free Trade Association and has a bilateral agreement with the European Union. Switzerland is one of the few European countries to have a trade surplus with China and the agreement was China`s first with a continental European nation. Switzerland`s trade surplus with China reached around $23 billion in 2012, thanks in part to the sale of luxury goods such as watches and chemicals. A big winner of the deal has been Nestlé, which will pass on the savings it can make under the deal to cut consumer prices in China to make its products more competitive. The Transatlantic Trade and Investment Partnership would remove the current barriers to trade between the United States and the European Union. It would be the largest deal to date and would even surpass the North American Free Trade Agreement. Negotiations were frozen after President Trump took office. Although the EU is made up of many Member States, it can negotiate as an entity. TTIP is therefore a bilateral trade agreement.
On the other hand, bilateral agreements are not bound by WTO rules and do not focus solely on trade-related issues. Instead, the agreement generally targets specific policies to strengthen cooperation and facilitate trade between countries in certain areas. Bilateral agreements are not the same as trade agreements. The latter involves the reduction or elimination of import quotas, export restrictions, tariffs and other interstate trade barriers. Rules on trade agreements are also set by the World Trade Organization (WTO). A little further down the pipeline are possible agreements with India, South Korea and a China-Japan-Korea agreement. For most countries, international trade is governed by unilateral barriers of various types, including tariffs, non-tariff barriers and bans altogether. Trade agreements are a way to reduce these barriers and thus open up all parties to the benefits of increased trade. If negotiations on a multilateral trade agreement remain unsuccessful, many countries will instead negotiate bilateral agreements.