Question

What are your thoughts about regional trade agreements? Multilateral trade agreements? Is your view similar to the WTO?

Answer 1

In the WTO, regional trade agreements (RTAs) are defined as reciprocal trade agreements between two or more partners. They include free trade agreements and customs unions.In international trade bilateral means between two nations and multilateral means among several nations. Must trade agreements under the World Organization rules (WTO) are set for multilateral trade as member countries must abide by these trade rules.

Non-discrimination is a core principle of the WTO. Members have committed, in general, not to favour one trading partner over another. An exception to this rule is RTAs. These deals, by their very nature, are discriminatory as only their signatories enjoy more favourable market-access conditions. WTO members recognize the legitimate role of RTAs which aim at facilitating trade between its parties but which do not raise trade barriers vis-à-vis third-parties.

WTO members are permitted to enter into RTAs under specific conditions which are spelled out in three sets of rules. These rules cover the formation and operation of customs unions and free-trade areas covering trade in goods (Article XXIV of the General Agreement on Tariffs and Trade 1994), regional or global arrangements for trade in goods between developing country members (Enabling Clause), as well as agreements covering trade in services (Article V of the General Agreement on Trade in Services). Generally speaking, RTAs must cover substantially all trade - unless they are under the Enabling Clause - and help trade flow more freely among the countries in the RTA without raising barriers to trade with the outside world.