Regional Trade Agreement Wto

Whether it is bilateral trade pacts, major unions or continental trade agreements, all WTO members will have some kind of regional trade agreement in force from June 2016. These agreements have increased in number and complexity since the early 1990s. One of the most frequently asked questions is whether these regional groups support or hinder the multilateral trading system of WTOs. WTO members, who work on various committees, are working to address these concerns. Regional trade agreements (ATRs) have multiplied over the years and have achieved, including a significant increase in major multilateral agreements being negotiated. Non-discrimination between trading partners is one of the fundamental principles of the WTO; However, reciprocal preferential agreements between two or more partners are one of the exceptions and are allowed by the WTO subject to a number of provisions. Information on WTO-notified ATRs is available in the RTA database. Other non-general preferential regimes, such as. B non-reciprocal preferential agreements, involving developing and industrialized countries, require members to request a waiver from WTO rules. These exceptions must be approved by three-quarters of WTO members. Examples of such agreements currently in force include the US Caribbean Basin Economic Recovery Act (CBERA), the CARIBCAN agreement, in which Canada provides non-reciprocal duty-free access to most Caribbean countries, Turkey`s preferential treatment for Bosnia and Herzegovina, and the EC-ACP partnership agreement. Non-discrimination is a fundamental principle of the WTO.

Members generally committed not to favour one trading partner over another. An exception to this rule are the RTAs. These transactions are inherently discriminatory, as only their signatories benefit from more favourable market access conditions. WTO members recognize the legitimate role of RTA, which aims to facilitate trade between its parties, but which would not create barriers to trade vis-à-vis third parties. WTO members also stated that ATRs can complement the multilateral trading system, not replace it. Director-General Roberto Azevédo said that many key issues – such as trade facilitation, liberalisation of services and subsidies for agriculture and fisheries – can only be addressed comprehensively and effectively if everyone has a place at the negotiating table. In addition, a multilateral system ensures the participation of the smallest and weakest countries and contributes to the integration of developing countries into the global economy. Meanwhile, preferential trade agreements (EPAs) refer to unilateral trade privileges such as the Generalized Preference System (GSP) and non-reciprocal preferential programmes implemented by some WTO members for products from developing and least developed countries. Information on preferential trade regimes notified to the WTO is available in the PTA database. 30 The 57 currently notified agreements on trade with non-WTO countries reflect the ongoing practice that dates back to the 1970s, 1980s, 1990s and the past two decades. Opinions differ on the impact of the RTA on global trade liberalization.

Although ATRs are intended for signatory countries, the expected benefits can be underestimated if distortions in resource allocation, diversion of trade and investment are not minimized. 56 „Working Group IV Report on Organizational Issues,“ doc. L/327, 22 February 1955, paragraph 39: „The Group has addressed the issue of the extension by the Contracting Parties of the benefits of the agreement to non-contracting parties through bilateral agreements.