What Is Enhanced When Creating Regional Trade Agreements
December 20, 2020
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. A regional trade agreement (RTA) is a treaty between two or more governments that sets the trade rules for all signatories. Examples of regional trade agreements include the North American Free Trade Agreement (NAFTA), the Central American-Dominican Free Trade Agreement (CAFTA-DR), the European Union (EU) and the Asia-Pacific Economic Cooperation (APEC). Member States benefit from trade agreements, including increased employment opportunities, lower unemployment rates and increased market opportunities. Since trade agreements generally come with investment guarantees, investors who wish to invest in developing countries are protected from political risks. The preferential trade agreement requires the least commitment to removing trade barriers Trade barriers are legal measures taken primarily to protect a country`s national economy. They generally reduce the amount of goods and services that can be imported. These barriers are put in place in the form of tariffs or taxes and, although Member States do not remove barriers between them.
There are also no common trade barriers in preferential trade zones. In general, this mechanism has been seen as a success in improving transparency and creating comprehensive information on ATRs, which can support the honest discussions of CRTA members. Regional trade agreements are multiplying and changing their nature. In 1990, 50 trade agreements were in force. In 2017, there were more than 280. In many trade agreements, negotiations today go beyond tariffs and cover several policy areas relating to trade and investment in goods and services, including rules that go beyond borders, such as competition policy, public procurement rules and intellectual property rights. ATRs, which cover tariffs and other border measures, are “flat” agreements; THE RTAs, which cover more policy areas at the border and at the back of the border, are “deep” agreements. 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. A free trade agreement removes all barriers to trade among members, which means that they can freely move goods and services between them.