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Regional Trade Agreements and the WTO

Regional Trade Agreements and the WTO. Roberto Fiorentino World Trade Organization. Regional Trade Agreements and the WTO. Outline: Some facts and figures RTAs and the WTO DDA negotiations. 1. What is a Regional Trade Agreement?. A problem of definitions:

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Regional Trade Agreements and the WTO

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  1. Regional Trade Agreements and the WTO Roberto FiorentinoWorld Trade Organization

  2. Regional Trade Agreements and the WTO Outline: • Some facts and figures • RTAs and the WTO • DDA negotiations

  3. 1. What is a Regional Trade Agreement? A problem of definitions: Preferential Trade Arrangements (PTA) these are trade arrangements under which a party agrees, either unilaterally or as a result of negotiations, to accord one or more other parties preferential treatment in trade in goods or services. Free-Trade Agreement (FTA) a contractual arrangement between two or more countries under which they give each other preferential market access Regional Trade Arrangement (RTA) a free-trade agreement, customs unionor common marketconsisting of two or more countries

  4. 2. How many RTAs are there? • As of November 2008, 418 RTAs have been notified to the GATT/WTO of which 227 are currently in force • 161 RTAs cover trade in goods; 54 trade in services; and 12 are accessions to existing RTAs

  5. Typology of RTAs Notified RTAs in force as of November 2008 • FTAs account for the great majority of RTAs notified and in force RTAs signed and under negotiations • ...and of the projected RTAs

  6. The global landscape of RTAs Participation in RTAs (goods) as of January 2009* 1 to 4 5 to 9 10 to 19 20 to 26 No data 1 to 4 * Notified and in force.

  7. Configuration of RTAs RTA configuration as of November 2008 • Bilateral RTAs account for the majority of RTAs notified and in force and of future RTAs Cross-regional RTAs as of November 2008 • Cross-regional RTAs account for a large share of future RTAs

  8. EFTA Canada EC Chinese Taipei United States China Japan Egypt Israel Morocco Bahrain Jordan Korea Thailand CARIFORUM Mexico ECOWAS GCC ESA ASEAN CEMAC India Panama PACIFIC EPA Singapore SADC SACU Australia MERCOSUR Chile N. Zealand S. Africa Signed / In Force Under Negotiation Under Consideration Global & regional developments The spaghetti bowl effect...

  9. 3. RTAs in the WTO What is the legal nature of an RTA in the WTO? Derogations & exceptions • General Exceptions • Security Exceptions • Waivers • S&D (GSP, EBA, etc) • RTAs • Basic principles: • MFN • National Treatment WTO Non - Discrimination RTAs are the major exception to MFN (Article 1)

  10. RTAs & the WTO What type of an exception is an RTA? • RTAs are permitted albeit conditional exceptions to the MFN principle; • RTAs can be established in accordance with the following conditional legal provisions: • GATT Article XXIV • Enabling Clause Goods • Understanding on GATT Art. XXIV Services • GATS Article V • To invoke the exception the RTA has to be notified

  11. Common Principles • The purpose of an RTA is to facilitate trade among the parties through the reduction or elimination of tariffs and other barriers to trade • The RTA must provide for mutual/reciprocal trade concessions • The attainment of the internal objective of trade liberalization must not entail placing barriers towards non-RTA parties higher than those existing before the formation of the RTA

  12. 4. RTAs & WTO: problems? Lack of transparency: • Failure to comply with notification obligations • Where notified, inadequate information provided Systemic concerns: • Proliferation of RTAs • Divergent interpretation of WTO provisions on RTAs Institutional deadlock: • No effective WTO surveillance mechanism of RTAs • No consistency assessment of the RTAs in force

  13. 5. DDA negotiations on RTAs: the mandate The Doha Ministerial Declaration (14 Nov 2001) contains two references to RTAs: §4 Recognize the WTO as unique forum for global trade rule-making and liberalization ... and RTAs’ role in trade liberalization and development Preambular language §29 Calls for negotiations to clarify and improve WTO rules and procedures on RTAs ... taking into account RTAs’ developmental aspects Negotiating Mandate

  14. Procedural Requirements

  15. State of play and what remains to be done RTA Transparency: • Review of the Mechanism - § 23 of WT/L/671 • Permanent application (Single Undertaking) • Database on RTAs Systemic Issues: • Last meeting dedicated to these questions was held in February 2007 • Main problem facing the Group is the lack of text-based proposals to advance the process • Chair has been holding bilateral consultations with Members to hear their views on the way forward

  16. Thank you Roberto.Fiorentino@wto.org RTA Section World Trade Orgainzation

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