What Is The Purpose Of Regional Trade Agreements
A common market is a kind of trade agreement in which members remove internal trade barriers, adopt common policies on relations with non-members and allow members to move their resources freely among themselves. Trade agreements open many doors. With access to new markets, competition intensifies. Increasing competition is forcing companies to produce better quality products. It also leads to greater diversity for consumers. If there are a variety of high quality products, companies can improve customer satisfaction. Deep trade agreements are an important institutional infrastructure for regional integration. They reduce business costs and set many rules in which economies are active. If designed effectively, they can improve political cooperation between countries and thus promote international trade and international investment, economic growth and social well-being. Studies by the World Bank Group show that companies in Member States benefit from greater incentives to trade in new markets through the strategies contained in the agreements. Regional trade agreements have the following advantages: Regional trade agreements (ATRs) have multiplied over the years and are succeeding, including a significant increase in the major multi-lateral agreements being negotiated.
Non-discrimination between trading partners is one of the fundamental principles of the WTO; However, reciprocal preferential agreements between two or more partners are one of the exceptions and are allowed by the WTO subject to a number of provisions. Information on WTO-notified ATRs is available in the RTA database. Full integration of Member States is the last level of trade agreements. “As a result, these agreements are increasingly defining new rules that govern trade between their parties and 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. Today, ATRs are evolving in a way that goes beyond existing multilateral rules.
The areas that cover them – investment, capital and people, competition and state-owned enterprises, e-commerce, anti-corruption and intellectual property rights – are key policy issues that need to be addressed in today`s more interconnected markets.