Regional Agreements On Trade

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. Businesses in Member States benefit from increased incentives to trade in new markets as a result of the measures contained in the agreements. To the extent that atRAs go beyond WTO commitments and remain open to further participation by countries committed to their standards, they can complement the multilateral trading system. Over the years, the OECD has examined the relationship between regional trade agreements and the multilateral trading system, including specific policy areas addressed by ATRs, such as agricultural addressing, technical regulations, compliance standards and procedures, investment rules on international technology transfer, integration of environmental considerations and approaches to market opening in the digital age – to name a few. In collaboration with partners such as the WTO and the OECD, the World Bank Group provides information and support to countries wishing to sign or deepen regional trade agreements. In practical terms, WBG`s work indicates that “such agreements increasingly define new rules governing trade between their parties that are not extended to all other WTO members. In addition, some of these issues are not regulated by the WTO in international trade.

The inclusion of these provisions indicates that there is a growing divergence between existing WTO and ATR rules. This is another challenge for the multilateral trading system, firstly because it makes WTO rules less relevant to some trading partners and, second, because WTO members who are not part of the RTA network are increasingly excluded from these rules. With regard to the first challenge, recent investigations by the WTO secretariat indicate that the divergence of some provisions may be less pronounced, given that ATRs generally tend to repeat WTO rules. With regard to anti-dumping, safeguarding measures and, to some extent, health and plant health standards and measures, most ATRs retain the rights and obligations of contracting parties in the WTO. In other areas, although the RTA creates new rules, many parties take a similar approach that is common to all or most of their ATRs. This “model approach” could, to some extent, reduce the magnitude of the discrepancy. Many ATRs contain elements that deepen regulatory cooperation and new market opportunities are created, even as participants address structural barriers in their own economies. Next-generation RTAs are working to go further.

Countries wishing to participate in and benefit from global markets must increasingly integrate trade and investment measures into their broader national structural reforms. Indeed, countries may be able to use the current and future negotiations on the “beyond the border” regime as the engine of desired internal political reforms.