Preferential Trade Arrangements

Preferential trade arrangements in Global Commerce Policy

In this regard, a definition of this issue is as follows: these are trade arrangements under which a party agrees, either unilaterally or as a result of negotiations, to accord one or more other parties preferential treatment in trade in goods or services. The scope for establishing such arrangements is subject to reasonably precise WTO rules, though developing countries have more flexibility. They may give each other preferences in the form of reduced tariffs, their complete elimination or, in the case of services, partial liberalization. Developed countries must establish either a free-trade area, a customs union or, in the case of services, an economic integration agreement. That is, they must remove substantially all barriers to trade among those receiving preferences. The entries on trade policy are here. If, for example, they wanted to give each other a preference in some product lines only, they would have to offer the same access conditions to all of their trading partners under the rule of most-favoured-nation treatment. The entries on trade policy in the Encyclopedia are here. Under the WTO rules, preferential trade arrangements are legal also in the form of GSP schemes set up by developed countries, and participation in the GSTP scheme by developing countries. For preferential arrangements other than these, it would be necessary to obtain a waiver. Some classify treaties of friendship, commerce and navigation as preferential agreements because the parties to them might be guaranteeing certain standards of behaviour towards the other party without giving trade preferences. See also Caribbean Basin Initiative, imperial preferences arrangement, ACP-EC Partnership Agreement, preferential market access and SPARTECA.[1]

Preferential trade arrangementsin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Preferential trade arrangements” entry (OAS)

See Also