Regional Trade Agreement and International Law

By

ABSTRACT

Regional trade agreements (RTAs) are a characteristic feature of the modern multilateral trading system. Their number, as well as, their share of preferential trade in total international trade in the last 10 years has showed growth. RTA's or regional trade agreements are trade agreements between two or more countries in the same region. The intention of a regional trade agreement is to enhance trade between the countries who are involved in the trade agreement. However, from an international perspective it is very important to look after these agreements, and for the purpose, WTO (World Trade Organization) looks after the different regional trade agreements.

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

Signed __________________ Date _________________

TABLE OF CONTENTS

ABSTRACTII

ACKNOWLEDGEMENTIII

DECLARATIONIV

CHAPTER 1: INTRODUCTION1

Background1

Regional Trade Agreements on the Multilateral Trade Agreement2

Failure of Doha Round - WTO's vision of Global Free Trade a distant reality5

Doha Round negotiations5

Compatibility of WTO's multilateralism with Regional Trade Agreements6

International law7

The Coverage of Regional Trade Agreements under International Law7

Effects of regional trade agreement on economic welfare8

Legally Nonbinding Rules (Soft Law)9

WTO's Role10

Subjects of International Law10

General Economic Environment11

Domestic Economy11

Regional Trade Agreements and WTO11

Long Run Effects of Regional Trade Agreements on the World Trade16

Content of the new regionalism16

Treaties17

Impact of the Global Financial Crises18

Innovations in the financial market18

Long Run Effects of RTA on World Trade18

Empirical Approach19

Developing Country RTAs19

U.S. v. RTA Trade Shares in Developing Countries20

Trade Share by Sector20

United States vs. Other Developed Countries' Trade Share in Developing Countries22

Comparing the United States' Performance22

Preferential Tariffs v. MNF Tariffs22

Significance of the Study22

Rationale23

Research Questions23

Reliability and Validity23

Ethical Consideration24

BIBLIOGRAPHY28

CHAPTER 1: INTRODUCTION

Background

When the Great Depression started in 1929, countries tried to get out of a serious economic slump by securing their domestic markets for domestic commodities. They restricted the amount of trade by raising tariffs and limiting the amount of imports from other countries. Such protectionist actions caused countervailing restrictive trade actions from other countries, all of which made the depression longer and deeper than it needed to be. Worst still, these actions triggered the creation of emerging blocs and “economic nationalism,” that ultimately helped pushes countries into World War II. In this context, since the 1990s, countries have begun to make bilateral Regional Trade Agreements (RTAs) as well as multilateral ones to create alternative trade relationships without trade barriers such as tariffs ...