A Framework For Evaluating Regional Trade Agreements

From the outset, GATT and now the WTO have allowed Member States to enter into free trade unions and zones, as an exception to the fundamental principle of non-discrimination established in the most favoured nation clause of Article I. Article XXIV of the GATT set the terms of the exchanges. The main principle is to facilitate trade between constituent countries and not to remove trade barriers for other WTO members who are not parties to the ATR. During the Uruguay Round, Article XXIV was, to some extent, clarified and updated by interpretation. Preferential trade agreements between developing countries are governed by a 1979 enabling clause. For trade in services, the conclusion of RTA is governed by Article V of the GATS. In Seattle, some WTO members wanted to put on the agenda of the WTO Ministerial Conference a revision of Article XXIV of the GATT and Article V of the GATS. Given the growing backlog of unassured audit reports and the question of the coherence of key ATRs under WTO rules, the relationship between regionalism and multilateralism has become a critical systemic issue that will likely require political progress at the next WTO Ministerial Conference in Doha. Finally, and above all, there is the economic dimension. Today, this goes far beyond the impact of tariff preferences on RTA members and third parties.

Given the large and growing number of free trade agreements and their dual membership, it is more about the impact of regional agreements on the organization and development of world trade itself. Whatever happens in Doha, it will be one of the most important challenges facing trade leaders on all continents in the coming years. Most WTO members are now also parties to regional trade agreements (ATRs). These numbers have expanded considerably in number, size and coverage, and their numbers continue to increase. It is estimated that more than half of world trade is now done under preferential trade agreements. RTAs exist on every continent. Among the best known are the European Union, the European Free Trade Association (EFTA), the North American Free Trade Agreement (NAFTA), the Southern Common Market (MERCOSUR), the Association of Southeast Asian Nations (ASEAN) and the East and South African Common Market (COMESA). The extension and scope of regional trade agreements makes it important to analyse the need for further clarification of the WTO`s system of tariffs and obligations with respect to regional trade agreements. There is no common agreement among WTO members on whether or not the ATRs support the development of the multilateral trading system, whether they act as building blocks or stumbling blocks. One view is that RTAs, which generally evolve faster than the multilateral trading system, are one way to strengthen it. The positive effects of ATRs on the integration of developing countries into the global economy are also highlighted. Other members felt that, under the current circumstances, there was a need to redefine the relationship between atRs and the multilateral trading system in order to achieve better synergy between the two.

A new interpretation of the rules developed 50 years ago would not be sufficient to take into account fundamental changes in the nature and extent of the geographic coverage and coverage of the RTA and its increasing overlapping membership. During the GATT years, the RTA review was conducted in different working groups. In Order to ensure consistency in their review, the General Council established a single committee in February 1996 to oversee all ATRs, the Regional Trade Agreements Committee (ATC). In addition to reviewing individual regional agreements, another important task of the Committee is to examine the systemic impact of the ATR on the multilateral trading system and the relationship between them.

You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

Comments are closed.