Market access refers to the ability of a company or country to sell goods and services across borders. Market access can be used to refer to domestic trade as well as international trade, although the latter is the most common context. Market access is not the same as free trade.
The ability to sell in a market is often accompanied by tariffs, duties, or even quotas, whereas free trade implies that goods and services flow across borders without any extra costs imposed by governments. Even so, market access is seen as an early step toward deepening trade ties. Market access is increasingly the stated goal of trade negotiations as opposed to true free trade.
KEY TAKEAWAYS:
- Market access refers to the ability of a company or country to sell goods and services across borders.
- Tariffs, duties, and quotas may all be a component of market access, which should not be confused with the term “free trade.”
- Market access is often negotiated between countries for their mutual benefit, but it may not necessarily result in freer trade.
Understanding Market Access
International trade involves complex negotiations between two or more governments. Throughout these negotiations, participants typically push for market access that favors their particular export industries while also attempting to limit market access to import products that could potentially compete with sensitive or politically strategic domestic industries.
Market access is considered distinct from free trade because the process of negotiation is aimed at beneficial trade that may not necessarily be freer trade.
Market Access as the New Trade Reality
The give and take surrounding market access negotiations characterizes international trade today and explains why most negotiations seek broader market access rather than freer trade. After decades of increasing global trade, there is evidence that large swaths of people no longer support universally free trade due to concerns over domestic job security.