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Why Is Regional Trade Agreements Important

Trade diversion is equally distributed in equally developed advanced economies. The oft-cited example of Japanese goods distributed from the EU market as a result of TTIP`s proposed changes to technical standards suggests that trade in advanced electronic devices could be diverted from Japan to the EU or to another equally developed participating country that manufactures such advanced electronic devices; However, developing countries may not be able to produce such products. [81] In addition, in citrus, trade in the product was diverted from the United States to the poorest Mediterranean countries. [82] Proposing remedies for trade diversions to all countries can therefore be counterproductive in terms of the gradual allocation of resources and trigger new disputes between equally (un)developed countries without contributing to global equality. However, if there are no WTO rules yet,. B for example for competition, the environment, labour, small and medium-sized enterprises (SMEs) and gender, the possibility of different rules that apply to different trade relations is a greater danger. However, even for such issues, it is more likely that the new rules created in RTAs will be implemented by cab parties on a non-discriminatory basis for practical reasons. Other provisions, such as join clauses, allow third parties to join existing RTAs. For example, the CPTPP is an extension of an existing RTA (Trans-Pacific Strategic Economic Partnership) between Brunei, Chile, New Zealand and Singapore.

Similarly, RTAs that allow a certain percentage of a product to contain inputs from third parties and are nevertheless eligible for preferential treatment allow producers to maintain their existing production chains. The second topic mentioned above is a particular challenge for developing countries, many of which are outside RTA networks and production and value chains. An important exception is the effort to implement the African Continental Free Trade Agreement (AfCFTA), which brings together 49 African countries and aims to liberalize trade barriers for goods and services. Although it has so far only been ratified by 13 countries, it has the potential to significantly reduce trade barriers, especially those affecting intra-African trade. Regional trade agreements vary according to the level of commitment and agreement among member countries. A country or company in developing countries may therefore be better off not acting under the terms of the regional free trade agreement. It may be preferable not to join an RTA and continue to act under the existing terms of WTO multilateral rules. In other words, what matters from the point of view of the progressive distribution of resources are the specific conditions of a transaction, not participation in an RTA, as Caruso suggests. Therefore, participation in a particular trade regime does not automatically contribute to the objective of a progressive allocation of resources. Non-discrimination is a fundamental principle of the WTO. Members have generally committed not to favour one trading partner over another.

RTAs are an exception to this rule. These agreements are inherently discriminatory, since only their signatories benefit from more favourable market access conditions. WTO Members recognize the legitimate role of RTAs, which aim to facilitate trade between their parties, but do not create barriers to trade vis-à-vis third parties. Specific provisions on trade in crisis/emergency situations could, for example, provide a clear but flexible definition of the term „emergency“. Consideration could be given to agreeing on provisional lists and criteria for „essential“ goods and services for different types of crises, building on existing international instruments where available. First, it is necessary to explain why the extension of a general and universal remedy for trade diversion may not contribute to global equality. One of the reasons for this phenomenon is that trade diversions very often take place, but not exclusively[77], between countries at a similar level of economic development. Thus, after the establishment of the Customs Union of the European Economic Community (EEC) in 1957, the EEC bought wine from southern Italy instead of Algeria. [78] Trade diversions from India to Turkey[79] or from India to Pakistan in textile cases before the WTO confirm the same trend.

[80] Trade diversion measures can therefore pit developing countries against each other rather than contributing to the progressive allocation of resources. It is recommended that transparency obligations be strengthened, including timely disclosure of trade measures taken in emergencies and information on developments in crisis situations that may affect trade. Mechanisms for the exchange of information need to be put in place, starting with the creation of resource libraries and regional (online) databases. The WTO system already recognizes the potentially negative consequences of participation in the free trade regime by providing a special regime for less developed countries. For example, some WTO agreements contain provisions that give developing countries longer transition periods before they have to fully implement the agreement, which is further evidence that they cannot always benefit from trade liberalization. Policymakers recognize the need for regional trade agreements to be consistent with multilateral rules and the need to ensure coherence among regional agreements and between regional and multilateral systems. Some countries are even negotiating RTAs with the explicit intention of setting precedents for the development of future multilateral rules, while others see further action in regional partnerships as a way to complement the multilateral system. In both cases, there are arguments for „multilateral-friendly“ practices that can help promote convergence.

Report on the treatment of medical devices in regional trade agreements (RTAs) Thanks to the wealth of ideas and information gathered during this first political hackathon and follow-up webinars, a practical manual is being developed to help negotiators develop regulations for trade in times of crisis and pandemic. The handbook will serve as a basis for workshops throughout 2021, in the hope that the integrative approach adopted so far will support agreements that can make trade increasingly resilient and sustainable. The law does not provide ready-made conceptual solutions for global justice,[89] even in the context of RTAs. At this crucial stage of the analysis, private law remains silent in identifying certain situations that would justify a means in trade diversion cases as well as in other cases of damage caused by existing WTO multilateral trade agreements. Identifying potential new trade measures requires an interest in political theory, political economy and other science. [90] New tools must be constantly developed to counter the ever-changing damage caused by the process of creative destruction. [91] Prejudice and justice in international trade must be formulated casuistically and detached from conceptual distinctions between existing areas of law. [92] Regional trade agreements have in the past acted as an exception to the rule of multilateral trade negotiations. Today, they are the driving force behind the liberalization of international trade.

This poses several challenges to democracy and legality. Nor should your own thinking be guided by the assumption that participation in a transaction such as an RBA is beneficial and that exclusion from participation is harmful. The impact on the countries of the South in international trade should not be considered exceptional and not only for the diversion of trade. To address the specific damage caused by RTAs and the multilateral trading system, further work is needed to articulate the unfair damage suffered by developing country actors in the global economy. This effort requires the participation of right-wing voices from the periphery of the world who will experiment and challenge existing understandings of evil. It requires the legal profession to play a fundamental role in the struggle for global justice. [94] [88] Bagchi argues that the smaller the number of people affected by a private action, the more concentrated the externality and the stronger the case for a private law remedy. See Aditi Bagchi, Other People`s Contracts, 32 YALE J. REG.

211, 229 (2015). In the context of trade diversion, a concentrated external dimension should be understood as an externality that disproportionately affects a particular economy. See Caruso, op. cit. Cit. Note 3, 413–14. [75] See e.B. Bernard Hoekman, Supply Chains, Megaregionals and Multilateralism: A Road Map for the WTO (2014); Gary Gereffi and Karina Fernandez Stark, Global Value Chain Analysis: A Primer, Duke Center for Globalization, Governance and Competitiveness (2016). .