Commentators disagree on the impact of RTAs on participants, non-participants and the overall trading system as a whole. Traditionally, all forms of trade liberalization, including those involving a small number of participants, were considered positive by economists. However, in the early post-war years, Jacob Viner showed that selective removal of tariffs may not constitute social assistance, as introduced tariff preferences could divert trade from efficient producers outside the region to less efficient producers in the region. For example, after NAFTA was signed, East Asian textile exporters were at a disadvantage in the U.S. market with Mexican suppliers, although many producers were more efficient. Global well-being suffers from discrimination by countries against the most efficient suppliers. Regional trade agreements depend on the level of commitment and agreement between member states. In the 1990s, the EU and NAFTA succeeded in stimulating intra-regional trade and investment flows. And contrary to some fears, they have not become closed trading blocs that have increased discrimination against non-members.

Its obvious success has encouraged other countries to build their own regional agreements (a development further encouraged by the slow pace of progress in WTO negotiations). The pace of regionalism accelerated markedly after the mid-1990s and spread to regions such as East Asia, where RTAs were few. As of May 2003, more than 265 ATRs had been notified to the WTO (and its predecessor, GATT). More than half of this amount was notified after the creation of the WTO in January 1995. More than 190 of these agreements are currently in force. Since agreements that exclusively link developing countries are not subject to Article XXIV and are sometimes not notified to the WTO, the actual number of ATRs put into service is much higher – probably more than 250. At the end of 2003, only one of the WTO`s 146 members – Mongolia – did not participate in a regional trade agreement. 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. Regional trade agreements have the following advantages: customs unions are agreements between countries in which the parties agree to allow free trade in products within the customs union and they agree on a common external customs law (ETC) for imports from the rest of the world. It is this CET that distinguishes a customs union from a regional trade agreement. It is important to note that, although trade within the Union is comprehensive, customs unions do not allow the free movement of capital and labour between Member States. The customs union of Russia, Belarus and Kazakhstan, founded in 2010, is an example. These countries have removed trade barriers between them, but they have also agreed on some common policies on relations with third countries. Common markets are similar to customs union unions in that they remove internal barriers between members and introduce common external barriers against non-members. This difference lies in the fact that common markets also allow the free movement of people (for example. B work) between member states.

An example of a common market is the Economic Community of West African States (ECOWAS), consisting of Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea,

Thursday, April 8th, 2021


Comments are closed.