But Article 24 of the General Agreement on Tariffs and Trade (GATT), Article 5 of the General Agreement on Trade in Services (GATS) and the Enabling Clause (Paragraph 2(c)) allow WTO members to conclude RTAs, as a special exception, provided certain strict criteria are met.
#Trading blocs definition free#
Normally, setting up a customs union or free trade area would violate the WTO’s principle of non-discrimination for all WTO members (“ most-favoured-nation”). They also recognize that under some circumstances these agreements could hurt the trade interests of other countries. The WTO agreements recognize that RTAs can benefit countries, provided their aim is to facilitate trade among its parties. Services, intellectual property, environmental standards, investment and competition policies are all issues that were raised in regional negotiations and later developed into agreements or topics of discussion in the WTO. In turn, some of these rules have paved the way for agreement in the WTO.
RTAs, defined in the WTO as reciprocal preferential trade agreements between two or more partners, have allowed countries to negotiate rules and commitments that go beyond what was possible multilaterally. Regional trade agreements (RTAs) seem to compete with the WTO, but often they can actually support the WTO’s multilateral trading system. WTO members, working in various committees, work to address such concerns.īack to top Regional trading arrangements One of the most frequently asked questions is whether these regional groups help or hinder the WTO’s multilateral trading system.
These agreements have increased in number as well as complexity since the early 1990s.
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