In return, China provides loans and technical or commercial assistance. Trade agreement Requirements for EU trade agreements, types of agreements, details of current trade agreements. The logic of formal trade agreements is to define what is agreed and the sanctions applicable to derogations from the rules established in the agreement.  Trade agreements therefore make misunderstandings less likely and create confidence on both sides that fraud is punishable; This increases the likelihood of long-term cooperation.  An international organization such as the IMF can further encourage cooperation by monitoring compliance with agreements and informing third countries of violations.  Monitoring by international agencies may be necessary to detect non-tariff barriers that are disguised attempts to create barriers to trade. .