RTAs: Facts and Figures
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1 RTAs: Facts and Figures WTO/ESCAP Regional Seminar on the WTO and Regional Trade Agreements (RTAs) for Asian Economies Bangkok, Thailand July2011
2 Objectives of the Seminar Increase participants' awareness of RTA dynamics in the region and in global trade relations. Improve understanding of WTO rules and procedures on RTAs and status of the Doha Development Agenda (DDA) negotiations in this area. Provide a forum to explore and discuss RTArelated issues of particular relevance to the region.
3 What is an RTA in the WTO? Types of preferential trade liberalization: Concessions Members Examples RTA? Reciprocal Selective EU, NAFTA, Mercosur, EPAs Unilateral Selective Cotonou, AGOA Unilateral Generalized GSP
4 Types of RTAs Economic Union Lesser coverage of economic activity Common Market Customs Union Free Trade Area Partial Scope More economic and political integration
5 Formation of a FTA Country A & B sign a FTA Tariffs are eliminated on most goods Each party maintains its tariff structure vis-à-vis third parties A rules of origin regime is put in place Other common features Reciprocal concessions (possible asymmetrical implementation) Inclusion of other regulatory features beyond tariff concessions Country A Uniform MFN tariff of 6% A B 0% duties Country B Variable MFN tariff %
6 Country A & B sign a CU Formation of a CU Tariffs are eliminated on most goods A common external tariff applicable to third countries is adopted A mechanism to share customs revenues is devised A temporary rules of origin regime may be put in place Compensation is paid to third countries if bound MFN rates are raised Country A Uniform MFN tariff of 6% A B 0% duties CET 5 10 % Country B Variable MFN tariff %
7 RTA trends & characteristics No. of RTAs Goods Services Accessions Cumulative As of June 2011, 296 notifications of RTAs have been received by the GATT/WTO and are currently in force Approximately 100 RTAs in the pipeline (signed, not yet in force/under negotiation) Unaccounted number of RTAs in force but not yet notified
8 Quantifying the proliferation of RTAs No. of notified RTAs WTO In force Inactive In force Inactive Article XXIV Article V Enabling Clause Total number of RTA notifications and annual averages: during the GATT years (29 still in force) 3 RTAs annually since 1995 (296 still in force) 22 RTAs annually
9 Typology of RTAs FTAs account for the great majority of RTAs notified and in force. Why? Notified RTAs in force as of June % 8% 82% Free Trade Agreement Customs Union Partial Scope Agreement
10 RTA: Some Trends 100% 47 RTAs are concluded particularly between two parties 80% 60% 40% 20% % Plurilateral Cross-Regional Bilateral Intra-Regional 24% 40% And especially between developing countries 36% Developed only Developed-Developing Developing only
11 Evolution of RTAs: scope and depth Trade in goods Defence remedies Standards, SPS-TBT Customs Trade in services Competition Investment IP Trade facilitation Environmental & Labour measures Tariffs Non-tariffs Barriers Trade policy disciplines Market access & National treatment Other trade regulations Mini-WTO regimes Regimes Institutional framework Dispute settlement
12 Global & regional developments Participation in Goods RTAs (notified and in force) as of May to 4 5 to 9 10 to to 30 No data
13 Global and regional developments Participation in Services RTAs (notified and in force) as of May to 2 3 to 4 5 to 9 10 to 15 No data
14 RTAs in force and under negotiation, by selected country groupings
15 Global & regional developments The spaghetti bowl effect... EFTA Canada EU United States Mexico DR-CAFTA CACM CARICOM MERCOSUR Morocco Cameroon Turkey Israel Jordan India China Brunei Singapore Korea Chinese Taipei Japan ASEAN Peru Chile SACU South Africa Australia New Zealand Transpacific SEP NAFTA EUROPEAN UNION EFTA PAFTA ECOWAS EAC SAFTA CACM CARICOM CEFTA GCC CEMAC SADC ASEAN CAN MERCOSUR CIS WAEMU COMESA SACU PICTA
16 The RTA phenomenon The number of RTAs continues to grow Expanding trade policy scope and reach of RTAs Shift from regional to cross-regional regional RTAs. Main indicators: Significant increase of number of cross-regional regional RTAs Predominance of bilateral RTAs Preference of FTAs over customs unions and partial scope agreements Consolidation of RTA networks into regional blocks The MTS landscape To sum up... Multiple layers of preferential trading regimes Trade discrimination, complexity, lack of transparency Systemic implications for the MTS/WTO
17 RTAs in Asia-Pacific Asia-Pacific RTA proliferation: Over half of RTAs currently under negotiation involve one or more countries from the Asia-Pacific region RTA configuration and partners: Some existing plurilateral agreements (ASEAN, SAFTA, APTA) but most m of the new RTAs are bilateral; consolidation into wider regional groupings is however on the agenda (TPP, ASEAN+3, 6) Many of the RTAs under negotiation include extra-regional regional partners Trade policy scope and market access provisions: The coverage of RTAs varies significantly from partial scope agreements to very comprehensive RTAs Many RTAs include liberalization of services trade and WTO+ provisions The principle of S&D is factored into some RTAs
18 RTAs in Asia-Pacific Some facts and figures: Total number of RTAs: 65 notified to the WTO 23 announced to the WTO as under negotiation Of the total number of notified RTAs (65): Coverage: 43 (Goods &Services) 22 goods only WTO legal provision: 19 under the Enabling Clause 2 under the Enabling Clause & GATS V 3 under Art. XXIV 39 under Art. XXIV and GATS V 2 dual notified under Enabling Clause/Art. XXIV and GATS V
19 RTA proliferation in the Asia-Pacific No. of RTAs st Asia RTA: Bangkok ag. PATCRA Sparteca CER 1 st services RTA India-Sri Lanka AFTA SAPTA Goods Services Accessions Cumulative
20 Asia Pacific Intra and Cross-Regional RTA network (notified and in force) Mexico Macao, China ASEAN United States PICTA Singapore PATCRA MSG Panama SPARTECA Jordan CER Chile South Asian Free Trade Area ASEAN Free Trade Area Pacific Islands Countries Trade Agreement (PICTA) Asia-Pacific Trade Agreement Brunei, Chile, New Zealand & Singapore
21 Need to connect the multilateral and bilateral brains of trade policy drivers and actors in order to attain greater coherence between the WTO and PTAs through successful multilateral negotiations. Continue the quest for greater legal clarity in WTO rules. The TM may pave the way for non-litigious deliberations that could build confidence and understanding about the motives, contents and policy approaches underpinning regional initiatives, leading to a shared vision and d reinforced legal provisions. WTO can play a greater role in promoting greater coherence among non- competing but divergent regulatory regimes that in practice cause geographical fragmentation or raise trade costs i.e. multilateralizing regionalism. -. What should the WTO be doing about RTAs...? The political view... Foreword to the 2011 World Trade Report
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