Last update - February 2012
Regional Trade Agreements
Background
The number of regional trade agreements (RTAs) negotiated between WTO members continues to grow rapidly and the challenge is to ensure they contribute to the health of world trade.
The current negotiations on RTAs aim at “clarifying and improving disciplines and procedures under the existing WTO provisions applying to regional trade agreements".The negotiations shall take into account the developmental aspects of regional trade agreements.
In the WTO
The WTO allows customs unions and free trade areas as an exception to the fundamental principle of non-discrimination (most-favoured-nation principle) on condition that such agreements boost trade between its member countries, do not raise barriers against trade with other WTO members, cover substantially all trade in goods and substantial sectoral coverage in services. But there is no agreement among members on what this means, and in practice many agreements leave out large and sensitive areas, such as agriculture and financial services. By the end of 2011, 509 RTAs had been notified to the WTO.
Progress so far in the Doha Round
An “early harvest” in this area was the adoption by WTO members in December 2006 of a mechanism to enhance the transparency of RTAs.
It calls for the notification of new bilateral trade agreements before the application of preferential treatment.
It calls for an enhanced role for the WTO whereby the Secretariat, on its own responsibility and in full consultation with the parties, shall prepare a factual presentation of all regional trade agreements notified to the WTO. This was launched in January 2009.
It calls for the establishment of a public database on RTAs, with information on all RTAs notified to the WTO. This is now available on the WTO website.
Discussions on “systemic issues” continue in the Negotiating Group on Rules, with divergent positions on issues such as how to interpret the phrase “substantially all the trade”, regulations that could restrict trade such as rules of origin under preferential schemes, and how regional agreements relate to development.
1