Preferential trading area

A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. A PTA can be established through a trade pact. It is the first stage of economic integration. The line between a PTA and a free trade area (FTA) may be blurred, as almost any PTA has a main goal of becoming a FTA in accordance with the General Agreement on Tariffs and Trade.

These tariff preferences have created numerous departures from the normal trade relations principle, namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members.[1]

With the recent multiplication of bilateral PTAs and the emergence of Mega-PTAs (wide regional trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or Trans Pacific Partnership (TPP)), a global trade system exclusively managed within the framework of the WTO now seems unrealistic and the interactions between trade systems have to be taken into account. The increased complexity of the international trade system generated by the multiplication of PTAs should be taken into account in the study of the choice of fora used by countries or regions to promote their trade relations and environmental agenda[2].

List of preferential trade areas

Stages of economic integration around the World (each country colored according to the most integrated form that it participates with):
  Economic and monetary union (CSME/EC$, EU/€, Switzerland–Liechtenstein/CHF)
  Economic union (CSME, EU, EAEU, MERCOSUR, GCC, SICA)
  Customs and monetary union (CEMAC/XAF, UEMOA/XOF)
  Common market (EEA–Switzerland, ASEAN)
  Customs union (CAN, EAC, EUCU, SACU)
  Multilateral Free Trade Area (CEFTA, CISFTA, COMESA, EFTA, GAFTA, NAFTA, SAFTA, AANZFTA, PAFTA, SADCFTA)

A free trade area is basically a preferential trade area with increased depth and scope of tariffs reduction. All free trade areas, customs unions, common markets, economic unions, customs and monetary unions and economic and monetary unions are considered advanced forms of a PTA, but these are not listed below.

Multilateral

Bilateral

Several hundred bilateral PTAs have been signed since the early 20th century. The TREND project[5] of the Canada Research Chair in International Political Economy lists around 700 trade agreeements, the vast majority of which are bilateral[6].

See also

References

  1. ↑ CRS Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition - Order Code 97-905
  2. ↑ Jean-Frédéric Morin, Tereza Novotná, Frederik Ponjaert and Mario Telò, The Politics of Transatlantic Trade Negotiations, TTIP in a Globalized World, Routledge, 2015, p. 127.
  3. ↑ From 18 March 1981 LI5342
  4. ↑ From 1 January 1981 WT/COMTD/N/29
  5. ↑ http://www.chaire-epi.ulaval.ca/en/ongoing-projects
  6. ↑ http://klimalog.die-gdi.de/trend/index.html

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