Preferential Trading Agreements And Regionalism

Member States benefit from trade agreements, including increased employment opportunities, lower unemployment rates and increased market opportunities. Since trade agreements generally come with investment guarantees, investors who wish to invest in developing countries are protected from political risks. The preferential trade agreement requires the least commitment to removing trade barriers Trade barriers are legal measures taken primarily to protect a country`s national economy. They generally reduce the amount of goods and services that can be imported. These barriers are put in place in the form of tariffs or taxes and, although Member States do not remove barriers between them. There are also no common trade barriers in preferential trade zones. A common market is a kind of trade agreement in which members remove internal trade barriers, adopt common policies on relations with non-members and allow members to move their resources freely among themselves. Regional trade agreements have the following advantages: whether they are bilateral trade agreements, major unions or continental trade agreements, all WTO members will have some kind of regional trade agreement in force from June 2016. Trade agreements open many doors. With access to new markets, competition intensifies. Increasing competition is forcing companies to produce better quality products. It also leads to greater diversity for consumers.

If there are a variety of high quality products, companies can improve customer satisfaction. Businesses in Member States benefit from increased incentives to trade in new markets as a result of the measures contained in the agreements. These agreements have increased in number and complexity since the early 1990s. One of the most frequently asked questions is whether these regional groups support or hinder the multilateral trading system of WTOs. WTO members, who work on various committees, are working to address these concerns. Regional trade agreements depend on the level of commitment and agreement between member states. Regional trade agreements refer to a treaty signed by two or more countries to promote the free movement of goods and services beyond the borders of its members. The agreement contains internal rules that Member States comply with each other. As far as third countries are concerned, there are external rules to which members comply. In particular, agreements should help to make trade between ATR countries freer without barriers to trade with the outside world. In other words, regional integration should complement, not threaten, the multilateral trading system.

Full integration of Member States is the last level of trade agreements. THE WTO agreements recognize that ATRs can benefit countries as long as their objective is to facilitate trade between their contracting parties.