Trade Agreement Area

In order to facilitate the implementation of the free trade area, the following institutions have been set up. As a result of the Phase II negotiations, additional committees may be set up through minutes. [38] Both trade creation and trade reorientation have a decisive impact on the creation of a free trade area. The creation of trade will result in a shift in consumption from a cost producer to a low-cost producer, which will lead to an expansion of trade. On the other hand, trade diversion will have the effect of shifting trade from a low-priced producer out of the zone to a more expensive one within the zone. [11] Such offshoring will not benefit consumers within the free trade area, which will be deprived of the opportunity to buy cheaper imported products. However, economists note that trade diversion does not always harm the overall national well-being: it can even improve national well-being as a whole if the volume of misappropriated trade is low. [12] Free trade agreements, which are free trade zones, are generally outside the multilateral trading system. However, WTO members must inform the secretariat when new free trade agreements are concluded and, in principle, the texts of free trade agreements are reviewed by the Committee on Regional Trade Agreements.

[8] Although a dispute is not the subject of litigation within the WTO`s dispute resolution body, “there is no assurance that WTO panels will comply and refuse to exercise jurisdiction in a particular case.” [9] With regard to the concept of a free trade area, the General Agreement on Tariffs and Trade (GATT 1994) originally provides for the inclusion of only trade in goods. [4] An agreement with a similar purpose, namely the improvement of trade in services, is referred to as the “economic integration agreement” in Article V of the General Agreement on Trade in Services (GATS). [5] However, in practice, the term is often used to refer to agreements that do not only concern goods, but also services and even investments. Maria Filipa Seara e Pereira advises the World Bank in the Trade Regional Integration Unit (ETIRI). It focuses on international trade and international development issues, including modelling, trade policy, trade distribution effects and global value chains. A free trade area is a group of countries that have little or no trade barriers in the form of tariffs or quotas between them.

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