Regional Trade Agreement (RSA) – The WTO uses the term “regional trade agreements” as a generic for all reciprocal agreements such as customs unions, free trade agreements and agreements with a partial scope. The Trend project of the Canada Research Chair in International Political Economy lists approximately 700 trade agreements, the vast majority of which are bilateral. Several hundred bilateral SAAs have been signed since the beginning of the twentieth century. The World Trade Organization unilaterally designates preferential trade agreements and reciprocal trade agreements as regional trade agreements. However, despite this principle, PTAs are permitted under Article XXIV of the WTO Charter. The WTO is partly governed by a “most Favored Nation” mentality, which states that no one should receive preferential treatment in international trade and that tariffs should be the same for everyone. Another controversy around ASTPs is their apparent contradiction with the principles of the World Trade Organization. In principle, we can distinguish between unilateral trade agreements and systems (proposed from one side to the other) and reciprocal trade agreements and systems (negotiated and agreed between the two parties). Preferential rules of origin are applied in order to prevent third countries from benefiting from preferential duties under a free trade agreement, without offering reciprocal benefits.
A country can be a member of several free trade agreements. Each free trade agreement is negotiated and agreed separately by the participating countries. In the United States, some sectors, such as auto and electronics manufacturers, favour ASAs because these agreements allow these industries to exploit low production costs in other countries in the hemisphere while avoiding competition from European and Japanese manufacturers, to which they would be exposed under a multilateral agreement.
A Regional Trade Agreement (RTA) is an example of a PTA. TPAs have grown rapidly In the 1990s, there were just over 100 PTAs. The increasing complexity of the international trading system resulting from the proliferation of PTAs should be taken into account when considering the choice of forums used by countries or regions to promote their trade relations and environmental agenda. With the recent proliferation of bilateral SPAs and the emergence of mega-TAPs (extended regional trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), a global trading system managed exclusively within the framework of the WTO seems unrealistic and the interactions between trading systems must be taken into account.
#Preferential treatment examples full
A final criticism of SAAs is that rich countries that contract SAAs force smaller countries to do the same, form trading blocs, and hinder progress towards full free trade.
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