What Is Preferential Trade Agreement

These tariff preferences have led to many departures from the principle of normal trade relations, namely that members of the World Trade Organization (WTO) should apply the same tariff to imports from other WTO members. [1] Given the recent proliferation of bilateral TTPs and the emergence of mega-PTAs (broad regional trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), a global trading system managed exclusively under the WTO now seems unrealistic and the interactions between trade systems must be taken into account. The increasing complexity of the international trading system resulting from the proliferation of EPZs should be taken into account when considering the choice of countries or regions used by countries or regions to promote their trade relations and environmental agendas. [2] ATPs have grown rapidly; In the 1990s, there were just over 100 PTAs. In 2014, there were more than 700. [3] As has already been mentioned, these are rules under which one country unilaterally offers preferential tariffs to another country or group of countries. The country that offers preference removes or reduces import duties on imports from these countries without the same preferences. These rules generally focus solely on trade in goods. First, it is one of the names that are sometimes used for free trade agreements, to emphasize their preferential nature, in contrast to trade liberalization under the WTO or unilateral reduction of tariffs. The way in which free trade agreements are designated may also be different. Most free trade agreements are designated by listing the participating countries and adding the term „FTA.“ For example, the Canada-Korea Free Trade Agreement. However, some free trade agreements are called under different names.

For example, the Canada-EU free trade agreement is referred to as a comprehensive economic and trade agreement. Other countries call their trade agreements Economic Partnership Agreements (EPAs) or Global Economic Partnerships (CEPs). Other variants are also used. The World Trade Organization unilaterally designates preferential trade agreements and reciprocal trade agreements as regional trade agreements. All of the above agreements are free trade agreements, but for a variety of reasons, members prefer to name them under another name. In many cases, these names reflect the broader scope of agreements: many recent free trade agreements go beyond the scope of traditional trade agreements and cover areas such as public procurement, competition, intellectual property, sustainable development, labour and the environment, etc. In principle, we can distinguish between unilateral trade agreements and systems (offered from one side to the other) and reciprocal trading systems (negotiated and approved by both parties).