Board Thread:Fiction Universe Discussion/@comment-4242472-20150730124646/@comment-25309944-20150801203610

It's important to note that real-life trade agreements (NAFTA, the TTP which is currently in the works, the European Coal and Steel Community, etc) are meant to facilitate trade. They set up free trade between countries (trade without trade barriers like tariffs or taxes on imports) rather than actually stand in for trade.

What I've seen happen in the fiction universe is that fictions don't trade until they have a "trade agreement" with a nation, whereupon they agree to trade x material for y goods, which would be a very very tedious way of carrying out international commerce. Commerce tends to happen whether there is a trade agreement in place or not, though governments can encourage the flow of imports and exports through trade agreements and discourage it through tariffs (taxes), subsidies, regulations, and other trade barriers.