TAFTA: Assuring its Compatibility with Global Free Trade (original) (raw)
Related papers
Regional trade agreements and the WTO
The North American Journal of Economics and Finance, 2001
The rapid growth in the number of regional trade agreements (RTAs) has led to concern about the weakening of the multilateral trading system. This paper looks at the spread of such agreements and the extent to which they pose a threat to the system.
TAKING STOCK OF GATT’S CONFLICTING PROVISIONS: COMPETITIVE LIBERALIZATION AND THE DEMISE OF THE WTO
Contained in the GATT, are provisions whose applications contradict each other. Article XXIV, which empowers WTO members to form regional trade agreements (RTAs), otherwise referred to as competitive liberalization, is contrary to the idea of the Most-Favored-Nation (MFN) principle set out article I. Indeed article XXIV is an exception to article I, however the conflict caused by these provisions, has led to a situation where the two will not co-exist for long, and one will eventually phase-out the other. While under article I, countries are prevented from discriminating between their trading partners, and any benefit granted to one member of the WTO must be extended to all WTO members; article XXIV gives countries the option of circumventing article I, to offer preferential trade benefits to only the select few with which they choose to trade through the formation of RTAs. Thus, conclusion of RTAs is a practice that is contrary to the interest of the World Trade Organization. Rules of origin present in most RTAs have a negative impact on competitive liberalization, a key goal of the WTO in combatting protectionism, as RTAs grant special treatment to members regardless of their inability to produce commodities more competitively than non-members due to the reciprocal benefits of RTAs. This seeks to frustrate the aims of the WTO in attempting to effectively regulate international trade, because while RTAs facilitate trade amongst its members; it hinders trade for non-member with which it has no trade desires. Regrettably, however, the WTO has faced increasing difficulty in the regulation of RTAs, in their manifold shapes and sizes.
Regional Trade Agreements: A Strike at Multilateralism
The Doha Round of negotiations of the World Trade Organization has become a major battleground between developed and developing countries. Begun in 2001, the Doha negotiations have yet to be concluded, leading to widespread frustration on its sluggish pace. Meanwhile, new Regional Trade Agreements have been launched, begging the question: Has trade governance reached a critical junction, with one path leading to the strengthening of the multilateral principles of global trade, and the other, to the abandoning of these principles and the evolution of a different constitution for 21st-century multilateralism? This paper reviews literature and legal text to deduce answers to these questions. It analyses the relationship between the Trans-Pacific Partnership (TPP) and Comprehensive Economic and Trade Agreement (CETA), and trade multilateralism. This paper finds that RTAs can be seen as a strike at multilateralism and this, in turn, can be regarded as either a negative or positive direction, depending on what principles and objectives are held as the legitimate building blocks of trade multilateralism.
With the creation of the World Trade Organization (WTO) in 1995, the pyramidal design of the international trading system placed multilateralism at the top of the pyramid, regionalism/bilateralism in the middle, and the domestic trade and economic policies of WTO Member States at the bottom of the pyramid. This article questions whether this vertical structure is still the case today, given the tremendous proliferation of regional trade agreements (RTAs) in recent years and the fact that the WTO is losing its centrality in the international trading system. The thesis of this article is that the multilateral trading system's single undertaking is no longer feasible, hence affirming RTA proliferation as the modus operandi for trade liberalization. This article also argues that RTA proliferation implies the erosion of the WTO law principle of non-discrimination, which endangers the multilateral trading system. RTAs can help countries integrate into the multilateral trading system, but are also a fundamental departure from the principle of non-discrimination. This raises the question of whether RTAs are a building block for further multilateral liberalization or a stumbling block.