Reciprocal Trade Agreement Law and Legal Definition

Reciprocal trade agreement is an agreement between two countries which provide for the exchange of goods between them at lower tariffs and better terms than that exist between one of the countries and other countries. Such agreements usually refer to treaties that deal with tariffs. This agreement is an international commercial treaty that grants two or more nations equally advantageous trade concessions to each other. Initially, reciprocity agreements involved bilateral tariff reductions that were not to be extended to third countries. Reciprocal agreements shall also deal with matters relating to the rights of foreigners and consular relations.