Regional Trade Agreements in the World Trade Order

Senti, Richard

doi:10.1007/978-3-540-78883-6_10

Richard Senti³

Part of the book series: European Yearbook of International Economic Law ((EUROYEAR,volume 1))

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Abstract

A total of 178 Regional Trade Agreements (RTAs) is registered with the World Trade Organization (WTO)¹ at present. Pascal Lamy, Director-General of the WTO, expects this number to rise to 400 notified RTAs within the next two to three years.² Most actively pursued are regional integration initiatives in Europe, the Middle-East and Northern Africa (MENA), North and Central America, Southeast Asia, China, Japan and South Korea. Latin America, Central and Southern Africa and the former Soviet Union have signed only a very small number of RTAs.

The author thanks Ms. Michaela Götze for the translation of the German version of this paper, and Ms. Indira Gurbaxani for her comments on an earlier draft.

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Notes

1.
http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.
2.
Lamy, Regional Agreements, Lecture in Bangalore/India, 17 January 2007, WTO-Homepage (effective January 2007).
3.
For the failed GATT Conference of Ministers 1982, cf. Baldwin, Changes in the global trading system: a response to shifts in national economic power, in: Salvatore (ed.), Protectionism and world welfare, 1993, p. 91.
4.
Cf. Wu, The ASEAN Economic Community under the ASEAN Charter, its External Economic Relations and Dispute Settlement Mechanisms, pp. 331 and 338 et seq. in this volume.
5.
E.g. South Asian Association Regional Cooperation Preferential Trade Agreement (SAPTA).
6.
Cf. Farasat, India’s Quest for Regional Trade Agreements: Challenges Ahead, Journal of World Trade 42 (2008) 3, pp. 433–460.
7.
A first Cross RTA was the agreement between the USA and Israel from 1985.
8.
Benedek, Die Welthandelsorganisation (WTO), 1998, p. 4.
9.
Cf. Bhagwati, The Unilateral Freeing of Trade versus Reciprocity, in: Bhagwati, (ed.), Going Alone, 2002, pp. 2 et seq.
10.
Cf. Katada/Solís, Cross Regional Trade Agreements, Understanding Permeated Regionalism in East Asia, 2008.
11.
Cf. Broude, Regional Economic Integration in the Middle East and North Africa: A Primer, in this volume, pp. 286 et seq.
12.
Since then, the EC has moved forward with integration and has established an International Partnership Agreement.
13.
Cf. Wu, The ASEAN Economic Community under the ASEAN Charter, its External Economic Relations and Dispute Settlement Mechanisms, in this volume, pp. 331 et seq.
14.
http://www.acp-eu-trade.org/epa/A11ACP.php (effective February 2008).
15.
Jackson, World Trade and the Law of GATT, 1969, p. 575.
16.
US Department of State, Proposals for Expansion of World Trade and Employment, Publ. 2411, November 1945.
17.
Cf. the List of customs unions and free-trade areas in Annex A–F of the GATT.
18.
A detailed presentation of the discussion at that time about the continuation or repeal of existing integration areas is to be found in: Brown, The United States and the Restoration of World Trade, 1950, pp. 72 et seq.; cf. also Senti, Reformbedarf der WTO im Bereich der Integrations- und Präferenzabkommen, Aussenwirtschaft 62 (2007) III, pp. 325 et seq.
19.
Cf. Brown, The United States and the Restoration of World Trade, 1950, pp. 155 et seq.
20.
Referring to Art. 44.4(b) Havana Charter (US Department of State, Havana Charter for an International Trade Organization, Publ. 3206, March 1948); cf. Brown, The United States and the Restoration of World Trade, 1950, p. 156.
21.
Cf. Brown, The United States and the Restoration of World Trade, 1950, p. 156.
22.
Special Protocol Relating to Article XXIV of the GATT of 3/24/1948, came into effect on 6/7/1948.
23.
Experts on international law judge the revision of Art. XXIV GATT referring to the Havana Charter as a legal best performance. Paras. 1 and 2 of Art. XXIV GATT correspond with Art. 42 of the Havana Charter, para. 3 with Art. 43, paras. 4–10 with Art. 44, para. 11 with Art. 99.1(d) incl. appendix 11, and para. 12 with Art. 104.3; cf. GATT, Analytical Index, 1970, p. 133.
24.
GATT, Trade policies for a better future, Proposals for action, 1985, pp. 20 and 41.
25.
A specification of Art. XXIV:5 GATT lies in the fact, that one has to take into account “weighted average tariff rates and of customs duties collected” while calculating “duties and other regulations”.
26.
Integration was not as current by the time of at which GATT was founded as it became within the decades to come. Shortly before the GATT conference in 1947, the customs union BeNeLux and the customs union Lebanon–Syria were formed; they were nevertheless promptly again dissolved. Up to 1953, two trade agreement notifications had arrived at the GATT, the trade agreements of South Africa with South Rhodesia, and the free-trade area Nicaragua and El Salvador. In the scope of preferences, a peculiar negotiation constellation arose. Great Britain spoke against the preference claims of developing countries, but defended coincidently its own preferences in favour of the Commonwealth countries. And the USA passed off the draft agreements (Proposals and Suggested Charter) as their own. They allegedly granted certain facilities within the scope of quotas and preferences to the British before. Heilperin speaks in this context of “A tale of frustration”: Heilperin, How the US Lost the ITO Conferences, in: FORTUNE, September 1949, p. 82.
27.
On the development of service trade regulation see Krajewski in this volume, p. 153 et seq.
28.
A discrepancy in Art. XXIV GATT lies in the fact, that developing countries which constitute an integration area are not bound by the National treatment towards corporate bodies owned by third WTO members. In comparison to the Dunkel report: insertion of Art. V.3(b) GATS; omission of Art. V.6(b) GATS.
29.
GATT, Trends in International Trade, A Report by a Panel of Experts, 1958 (Haberler Report).
30.
GATT 1972, BISD 18/24 et seq., with the appendix: Protocol Relating to Trade Negotiations Among Developing Countries, Decision of 26 November 1971, in: GATT 1972, BISD 18/26 et seq.
31.
GATT 1980, BISD 26/203 et seq.
32.
Enabling clause para. 2.
33.
Hummer/Weiss, Vom GATT ’47 zur WTO ’94, 1997, pp. 263 et seq.; the Group of 77 (G-77) was established on 15 June 1964 by 77 developing countries, signatories of the “Joint Declaration of the Seventy-Seven Countries”. Although the members of the G-77 have increased to 130 countries, the name G-77 was retained because of its historic significance, http://www.g77.org.
34.
Broude, Regional Economic Integration in the Middle East and North Africa: A Primer, in this volume, pp. 269 et seq. The contribution of T. Broude shows particularly distinctly how different economic standards, cultures and policies clash in the Middle East and North Africa, and therefore aggravate the elaboration of common integration agreements.
35.
Wu, The ASEAN Economic community under the ASEAN Charter, its External Economic Relations and Dispute Settlement Mechanisms, in this volume, p. 331 et seq.
36.
Dunoff, North American Regional Economic Integration: Recent Trends and Developments, in this volume, p. 297 et seq.
37.
With regard to the issue of the quantification of “substantially all the trade”, cf. GATT 1958, BISD 6/99; GATT 1959, BISD 7/71; Farasat, India’s Quest for Regional Trade Agreements: Challenges Ahead, Journal of World Trade 42 (2008) 3, p. 442; Herrmann, Bilateral and Regional Trade Agreements as a Challenge to the Multilateral Trading System, Aussenwirtschaft 63 (2008) III, p. 271.
38.
Dam, The GATT Law and International Economic Organization, 1970, p. 289; Haight, Customs Unions and Free-Trade Areas under GATT, Journal of World Trade Law 6 (1972) 4, p. 398.
39.
Roessler, The relationship between regional integration agreements and the multilateral trade order (Working paper), 1992, pp. 5 et seq.
40.
Crawford/Fiorentino, The Changing Landscape of Regional Trade Agreements, WTO, Discussion Paper No. 8, 2005; Fiorentino/Verdeja/Toqueboeuf, The Changing Landscape of Regional Trade Agreements: 2006 Update, WTO, Discussion Paper No. 12, 2007; Jovanovic, International Economic Integration, Limits and Prospects, (2nd ed) 1998, pp. 362 et seq.
41.
Jovanovic, International Economic Integration, Limits and Prospects, (2nd ed) 1998, p. 362.
42.
Farasat, India’s Quest for Regional Trade Agreements: Challenges Ahead, Journal of World Trade, 42 (2008) 3, p. 451, fn. 95.
43.
US Department of State, Proposals for Expansion of World Trade and Employment, Publ. 2411, November 1945, p. III.
44.
GATT, Trade policies for a better future, Proposals for action, 1985, pp. 20 and 41.
45.
Jackson, World Trade and the Law of GATT, 1969, p. 575, fn. 1.
46.
Crawford/Fiorentino, The Changing Landscape of Regional Trade Agreements, WTO Discussion Paper No. 8, 2005, p. 19, fn. 47.
47.
WTO, WT/MIN(01)/DEC/1, 20 November 2001, para. 29 (Ministerial Conference, Doha, 9–14 November 2001, Declaration).
48.
WTO, TN/RL/W/8/Rev. 1, 1 August 2002 (Compendium of Issues Related to RTAs).
49.
Cf. Senti, Reformbedarf der WTO im Bereich der Integrations- und Präferenzabkommen, Aussenwirtschaft 62 (2007) III, pp. 319–342.
50.
Viner, The Theory of Customs Unions, 1950.
51.
Lipsy, The Theory of Customs Unions: Trade Diversion and Welfare, Economica 24 (1957) 1, pp. 40–46.
52.
Johnson, The economic theory of customs union, Pakistan Economic Journal 10 (1960) 1, pp. 14–32.
53.
A clear and easily understood overview is to be found in: WTO, World Trade Report 2007, pp. 138 et seq. (with further references).
54.
This is for instance accurate if effectively all goods are transferred duty-free or at low customs tariffs from the market of an agreement partner, and surveillance of origin is initiated on all imported goods, because of the small third country stake.
55.
US Department of State, Proposals for Expansion of World Trade and Employment, Publ. 2411, November 1945, p. 4.

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ETH, Weinbergstrasse 94, 8006, Zürich, Switzerland
Richard Senti

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Chair for Constitutional and Administrative Law European Law, European and International Economic Law, Passau University, D-94030, Passau, Germany
Christoph Herrmann LL.M
Department of European Law, Hamburg University, Schlüterstraβe 28, 20146, Hamburg, Germany
Jörg Philipp Terhechte (Assistant Professor of Law, Faculty of Law) (Assistant Professor of Law, Faculty of Law)

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Senti, R. (2010). Regional Trade Agreements in the World Trade Order. In: Herrmann, C., Terhechte, J.P. (eds) European Yearbook of International Economic Law 2010. European Yearbook of International Economic Law, vol 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-78883-6_10

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DOI: https://doi.org/10.1007/978-3-540-78883-6_10
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