All these intertwined cases create confusion in trade. With regard to bilateral and regional agreements, it is essential, by definition, to determine the origin of imports. However, foreign direct investment (FDI), offshoring and merger practices can make the decision to trace the origin of a product a laborious one. Genealogical rules become comical: according to NAFTA, Mexican coats cannot be exported duty-free to the United States if Mexican fur manufacturers import either the substance or the yarn, unless the substance is Harris Tweed, which is imported from the United Kingdom (due to special treatment with the United Kingdom). A guarantee contract is when a guarantee provider creates an interest in financial guarantees in order to guarantee the amounts due to a warranty holder. The agreement does not have to be strictly bilateral. 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 areas of action that aim to strengthen cooperation and facilitate exchanges between countries in certain areas. Business contracts are almost always bilateral. Companies offer a product or service for financial compensation, so most companies are permanently entering into bilateral contracts with customers or suppliers. An employment contract in which a company promises to pay a certain rate to a candidate for the performance of certain tasks is also a bilateral contract. A major legal difference between syndicated and bilateral loans is that the obligations of syndicated lenders are multiple.
If a lender does not perform its functions, the other lenders are not responsible. In other words, a lender is only responsible for its own obligations. In a bilateral loan, the lender is responsible for the entire loan application. While some ASEAN-China agreements use non-legal titles, such as “action plan,” they can be implemented in legal language and in the legal sense. This is reflected in the action plan on the implementation of the Beijing Declaration on the ASEAN-China Cooperation Partnership for Joint Development, signed in January 2007 by the Chinese Foreign Minister and the ASEAN Secretary General.63 As has already been mentioned, a bilateral treaty has, by definition, reciprocal obligations. This is what differentiates them from a unilateral treaty. There is a wide literature on the causes and effects of regionalism. In the event of non-compliance, the benefits of regional or bilateral trade agreements depend on their impact on the creation or diversion of trade. However, regionalism and bilateralism create broader effects and risks that are relevant to the analysis of trade disputes: (1) regionalism is an insidious channel to protectionism; (2) regionalism and bilateralism lead to a complex network of agreements; (3) regionalism and bilateralism are not beneficial for poor countries; (4) Too much regionalism and bilateralism make it difficult to negotiate multilateral agreements. Bilateral trade agreements also expand a country`s product market.
In the early 2000s, the United States vigorously pursued free trade agreements with a number of countries under the Bush administration. McCalman (2002) proposes another argument in favour of the usefulness of the MFN rule.