A trade agreement refers to a contract between two or more states regarding their trade relations. It's a pact specifying a wide range of taxes, tariffs, trade restrictions etc. and could be bilateral or multilateral.
It exists when the countries involved come to a consensus on terms of trade with each other. All the duties and tariffs imposed by a country on imports and exports are determined by this agreement and hence, are directly related to international trade. The idea behind a trade agreement is to clearly outline what is agreed upon between the signatories and the consequences of deviating from the agreement.
BAF stands for Bunker Adjustment Factor. It refers to a change in carrier’s rates to accommodate the price of oil.