What Is Market Access?
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 the borders without any extra costs imposed by governments. Even so, market access is seen as an early step towards deepening trade ties. Market access is increasingly the stated goal of trade negotiations as opposed to true free trade.
Understanding Market Access
International trade involves complex negotiation 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
This give and take process characterizes international trade negotiations today and explains why most negotiations seek more 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. The United States, a long time proponent of freer global trade, has seen an increase in public distrust of free trade in conjunction with the rapid growth of its trading partners’ economies, particularly Mexico and China. However, the majority of people still want the benefits of international trade such as a wide variety of competitively priced goods and a strong export market for domestically produced products.
Despite the negative public sentiment towards international trade, it has consistently been the driver of overall global wealth although the wealth is not equally distributed. To avoid negative connotations, trade deals are now discussed in terms of market access rather than free trade. This is wordplay to some extent because many of the same aims are being met, and trade ties typically deepen over time because of the net gain for the economies involved. Interestingly, international trade as a term is being pushed out in favor of international commerce.