What Are Regional Trade Agreements (Rtas)

Regional trade agreements refer to a treaty signed by two or more countries to promote the free movement of goods and services beyond the borders of its members. The agreement contains internal rules that Member States comply with each other. As far as third countries are concerned, there are external rules to which members comply. Regional trade agreements (ATRs) have multiplied over the years and have achieved, including a significant increase in major multilateral 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. research by the United Nations Economic Commission for Africa (UNCA) in November 2018 showed that the implementation of the agreement would result in GDP growth of 1% and overall export growth of 3%. The greatest impact would be intra-African trade, which would reach more than 50% (and even more for some economies) depending on the ambition of liberalization. Provisions to be negotiated in the second stage, such as investment, competition and intellectual property rights, would further strengthen regional integration, Africa.To conclude that ATRs are likely to continue to increase in both numbers and coverage, while some aspects of RTA will continue to discriminate against third-party trade. They therefore remain the second best option compared to the multilateral rules that apply to all WTO members. However, some aspects of the ATR, particularly the rules, tend to be non-discriminatory and may therefore also be beneficial to non-RTA parties.

Policymakers benefit from a closer look at the impact of both types of provisions on global trade relations and international trade rules. 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. The preferential trade agreement requires the least commitment to removing trade barriers Trade barriers are legal measures taken primarily to protect a country`s national economy. They generally reduce the amount of goods and services that can be imported. These barriers are put in place in the form of tariffs or taxes and, although Member States do not remove barriers between them. There are also no common trade barriers in preferential trade zones. Many ATRs contain elements that deepen regulatory cooperation and new market opportunities are created, even as participants address structural barriers in their own economies. Next-generation RTAs are working to go further.

Countries wishing to participate in and benefit from global markets must increasingly integrate trade and investment measures into their broader national structural reforms.