Regional Trade Arrangement

Regional trade arrangement in Global Commerce Policy

In this regard, regional trade arrangement is: RTA. The entries on trade policy are here. A free-trade agreement, customs union or common market consisting of two or more countries (e.g. The entries on trade policy are here. ANZCERTA, NAFTA or the European Community). Some analysts see RTAs as building blocks for a freer non-discriminatory multilateral trading system, others as agents for its undermining. Historically, many RTAs between developing countries never got past the initial planning stage. Nor did others turn into arrangements of genuine usefulness. Some of the more recent arrangements are much more likely to succeed. More than 200 regional trade arrangements have been notified to the GATT under Article XXIV (which provides the legal exemption from the need to extend most- favoured-nation treatment) between 1947 and the present. The entries on trade policy are here. In the case of developed countries, duties and other restrictive measures of commerce have to be eliminated on substantially all the trade between the parties. John Whalley has listed six reasons why countries negotiate regional trade arrangements. First, they can obtain the traditional gains of trade. Second, countries use legally binding agreements to strengthen domestic policy reform. Third, countries hope to increase their multilateral bargaining power in this way. Fourth, free-trade arrangements can offer guaranteed access to markets. Fifth, for some countries the possibility of strategic linkages is important. The sixth reason is that countries may be able to benefit from the multilateral and regional interplay by emphasizing their interest in bilateral negotiations at critical points in the multilateral negotiations. Many commentators have noted that the current WTO rules on regional trade arrangements suffer from three main defects. First, they allow significant sectoral exemptions. Second, they skirt around problems caused by grey-area measures, contingent protection and rules of origin. Third, they fail to track regional agreements after they have been signed and if later rule changes are made. The entries on trade policy are here. In early 1996 the WTO established a Committee on Regional Trade Agreements to examine further their effect on the global trading system. Developing countries may also conclude RTAs under the Enabling Clause, and they have the option of reducing or eliminating tariffs and non-tariff measures. See also first regionalism, hub and spokes, second regionalism and substantially-all-trade criterion.[1]

Regional trade arrangementin the wold Encyclopedia

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

Resources

Notes and References

1. Dictionary of Trade Policy, “Regional trade arrangement” entry (OAS)

See Also