Tiêu đề Chapter 9 (Unit 3).pdf ✅

TAXONOMY OF REGIONAL TRADE AGREEMENTS Regional Trade Agreements (RTAs) are defined as groupings of countries, which are formed with the objective of reducing barriers to trade between member countries. ▪ In other words, a regional trade agreement (RTA) is a treaty between two or more governments that define the rules of trade for all signatories. ▪ As of 1 February 2021, 339 RTAs were in force. Trade negotiations result in different types of agreements which are discussed below- 1) Unilateral trade agreements under which an importing country offers trade incentives in order to encourage the exporting country, to engage in international economic activities that will improve the exporting country’s economy. � E.g. Generalized System of Preferences. 2) Bilateral Agreements are agreements that set rules of trade between two countries, two blocs or a bloc and a country. These may be limited to certain goods and services or certain types of market entry barriers. � E.g. EU-South Africa Free Trade Agreement; ASEAN–India Free Trade Area. 3) Regional Preferential Trade Agreements among a group of countries reduce trade barriers on a reciprocal and preferential basis for only the members of the group. E.g. Global System of Trade Preferences among Developing Countries (GSTP) TRADE NEGOTIATIONS GSP - - ↑ - ~A B. C D
4) Trading Bloc has a group of countries that have a free trade agreement between themselves and may apply a common external tariff to other countries. � Example: Arab League (AL), European Free Trade Association (EFTA) 5) Free-trade area is a group of countries that eliminate all tariff and quota barriers on trade with the objective of increasing exchange of goods with each other. The trade among the member states flows tariff free, but the member states maintain their own distinct external tariff with respect to imports from the rest of the world. ▪ In other words, the members retain independence in determining their tariffs with non- members. � Example: The ASEAN–India Free Trade Area (AIFTA) is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and India. it came into force on 1 August 2005 6) A customs union is a group of countries that eliminate all tariffs on trade among themselves but maintain a common external tariff on trade with countries outside the union (thus, technically violating MFN). ▪ The common external tariff which distinguishes a customs union from a free trade area implies that, generally, the same tariff is charged wherever a member imports goods from outside the customs union. � The EU is a Customs Union; its 27 member countries form a single territory for customs purposes. Other examples are Gulf Cooperation Council (GCC), Southern Common Market (MERCOSUR). 7) Common Market: A Common Market deepens a customs union by providing for the free flow of output and of factors of production (labour, capital and other productive resources) by reducing or eliminating internal tariffs on goods and by creating a common set of external tariffs. ▪ The member countries attempt to harmonize some institutional arrangements and commercial and financial laws and regulations among themselves. � There are also common barriers against non-members (e.g., EU, ASEAN) ↑ Bty P - - - ~ -
8) Economic and Monetary Union: The next stage in the integration sequence of common market is formation of some form of monetary union. In an Economic and Monetary Union, the members share a common currency. Adoption of common currency also makes it necessary to have a strong convergence in macroeconomic policies. � For example, the European Union countries implement and adopt a single currency The political institutions that facilitate trade negotiations, and support international trade cooperation by providing the rules of the game have been the former General Agreements on Tariffs and Trade (GATT) and the World Trade Organization (WTO). THE GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) ▪ The workings of the GATT agreement are the responsibility of the Council for Trade in Goods (Goods Council) The Goods Council has 10 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures, and so on). Again, these committees consist of all member countries. The GATT lost its relevance by the 1980s because it was obsolete to the fast-evolving contemporary complex world trade scenario characterized by emerging globalisation international investments had expanded substantially intellectual property rights and trade in services were not covered by GATT world merchandise trade increased by leaps and bounds and was beyond its scope. the ambiguities in the multilateral system could be heavily exploited efforts at liberalizing agricultural trade were not successful there were inadequacies in institutional structure and dispute settlement system it was not a treaty and therefore terms of GATT were binding only insofar as they are not incoherent with a nation’s domestic rules. ↑ -
THE URUGUAY ROUND AND THE ESTABLISHMENT OF WTO ▪ The need for a formal international organization which is more powerful and comprehensive was felt by many countries by late 1980s. The Uruguay Round brought about the biggest reform of the world’s trading system. Members established 15 groups to work on limiting restrictions in the areas of tariffs, non-tariff barriers, tropical products, natural resource products, textiles and clothing, agriculture, safeguards against sudden ‘surges’ in imports, subsidies, countervailing duties, trade related intellectual property restrictions, trade related investment restrictions, services and four other areas dealing with GATT itself, such as, the GATT system, dispute settlement procedures and implementation of the NTB Codes of the Tokyo Round, especially on anti-dumping. ▪ The Round started in Punta del Este in Uruguay in September 1986 and was scheduled to be completed by December 1990. ▪ However, due to many differences and especially due to heated controversies over agriculture, no consensus was arrived at. Finally, in December 1993, the Uruguay Round, the eighth and the most ambitious and largest ever round of multilateral trade negotiations in which 123 countries participated, was completed after seven years of elaborate negotiations. ▪ The agreement was signed by most countries on April 15, 1994, and took effect on July 1, 1995. It also marked the birth of the World Trade Organization (WTO) which is the single institutional framework encompassing the GATT, as modified by the Uruguay Round.