Training session - Vietnamese agriculture and WTO - Hanoi - sept WTO and the regional trade agreements (RTAs)

Training session - Vietnamese agriculture and WTO - Hanoi - sept Definition Free trade area (FTA): no tariff barriers on trade between two (or more) countries. Customs Union (CU): FTA + Common external tariff (common external trade policy) Regional trade agreement (RTA): may be a FTA or a CU. « Regional » does not imply that countries are neighbours (ex : Chile-EU; Australia-US). Differentiation from multilateral trading system (MTS)

Training session - Vietnamese agriculture and WTO - Hanoi - sept Article XXIV of GATT Allow RTAs, as exception to the MFN principle Paragraph 8.a) : a FTA is “ a single customs territory for two or more customs territories, so that duties and other restrictive regulations of commerce are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories”.

Training session - Vietnamese agriculture and WTO - Hanoi - sept Article XXIV of GATT (cont’d) Substantially all trade : –Following the EU-South Africa Trade agreement : Substantially = 90 % Asymmetric EU: fully open to 94 % of South African exports South Africa: fully open to 86 % of EU exports

Training session - Vietnamese agriculture and WTO - Hanoi - sept Evolution of RTAs Increasing number of RTAs notified to the WTO Acceleration of RTAs due to –weak progress in the Doha Development Agenda –failure of the Cancun Ministerial Conference Mainly in the Western Hemisphere (Americas) and Asia-Pacific region

Training session - Vietnamese agriculture and WTO - Hanoi - sept Notified RTAs to the GATT/WTO

Training session - Vietnamese agriculture and WTO - Hanoi - sept Challenges and opportunities Developing countries –Help to implement domestic reforms –Facilitating their insertion in the global economy Undermine predictability and transparency in international trade –Multiplication of regulations Decrease the interest to the MTS

Training session - Vietnamese agriculture and WTO - Hanoi - sept RTAs related trends Most of the country (even the more MTS) develop RTAs. Centrepiece of their commercial policy Complexification of RTAs: beyond WTO rules Increasing involvement of developing countries –RTAs with developed countries / non reciprocal trade regimes –South-South trade Expansion and consolidation: –Cross regional RTAs –Continent wide-scale (in the making) –RTAs between RTAs

Training session - Vietnamese agriculture and WTO - Hanoi - sept The noodle bowl of RTAs

Training session - Vietnamese agriculture and WTO - Hanoi - sept Scope and depth 84% of RTAs are FTAs From tariffs preferences to wide-ranging trade regulatory regimes Partial scope agreements: possible for Developing countries (Enabling clause) – limited product coverage (case of Asean) Recent RTAs: beyond the WTO framework –Provision on investment, competition, environment, labour

Training session - Vietnamese agriculture and WTO - Hanoi - sept RTAs in Asia – Pacific

Training session - Vietnamese agriculture and WTO - Hanoi - sept Conclusion Multiplication of RTAs complexifies trade relationships –Rules of Origin : if a country is member of several RTAs : exporters have to comply with several rules –Needs human resources to manage RTAs –Benefits are cancelled out Away from MTS –Negotiations more difficult for developing countries in front of big economies.