Other criticisms of RTAs are that they increase the cost of international trade for business (because each agreement has its own rules that businesses must abide by) and divert attention and resources from negotiations globally, where the potential for gains from trade liberalization is greatest. Proponents of RTAs, on the other hand, argue that they offer an opportunity to make progress on trade liberalization at a time when global negotiations are at a standstill (the smaller number of participants facilitate the conclusion of an agreement), that they allow governments to go beyond WTO agreements to create “deeper” integration. which can serve as a model for future global agreements. and that they strengthen export interests, which will provide an incentive to work towards further liberalization. The “new regionalism” at the WTO is too new an origin to allow a final verdict on the arguments for and against RTAs. It is argued that China`s rise to power has contributed to the decline of multilateralism and the WTO dispute settlement system. [7] The WTO has limited capacity to resolve frictions between trading partners arising from the specificities of China`s internal economic system. [8] Thus, the advanced economies that established the WTO`s multilateral system have turned elsewhere to deal with China`s rise. [9] For example, one of the objectives of the TPP was to address perceived trade imbalances between China and the United States. [10] Trade agreements open many doors for businesses. With access to new markets, competition becomes more intense. Increased competition is forcing companies to produce better quality products.
This also leads to more variety for consumers. When there is a variety of high-quality products, companies can improve customer satisfaction. Nor should one`s own thinking be guided by the assumption that participation in a transaction such as an RBA is beneficial and that exclusion from participation is harmful. Damage to the countries of the South in international trade should not be considered exceptional and should not be due exclusively to the diversion of trade. To address the specific damage caused by RTAs and the multilateral trading system, further work is needed to articulate the unfair damage suffered by developing country actors in the global economy. This effort requires the participation of legal voices from the periphery of the world who will experiment and challenge existing understandings of harm. It requires the legal profession to play a fundamental role in the struggle for global justice. [94] After addressing the various challenges posed by RTAs and the opportunities for non-parties to challenge their legality, this analysis focuses on creating remedies for damages resulting from trade diversion for the purpose of “global justice”. It draws on lessons learned from antitrust law, another area of law that imposes restrictions on freedom of contract in the fight against global inequalities, to show that addressing concerns understood as “social” does not necessarily contribute to the progressive allocation of resources. In conclusion, it argues that the hierarchical structure of world production must be taken into account in order to combat the inequalities fostered by trade diversions through RTAs as well as by the existing multilateral trading system of the WTO. Daniela Caruso`s remarkable article “Non-Parties: The Negative Externalities of Regional Trade Agreements from a Private Law Perspective”[3] addresses the need to take remedial action against trade diversion by RTAs through the prism of private law.
Contracts naturally exclude third parties. Private law limits on freedom of contract thus provide non-parties to RTAs with analytical information on possible claims for damages. However, that analysis submits that Caruso`s contentious starting point, namely that participation in an RTA is beneficial and that exclusion from an RTA is prejudicial, calls into question the subsequent search for remedies based on that assumption. In cooperation with partners such as the WTO and the OECD, the World Bank Group informs and supports client countries wishing to sign or deepen regional trade agreements. Specifically, the World Bank Group`s work includes: Preferential Trade Agreement Requires the Least Commitment to The Removal of Trade BarriersTrade Barriers are legal measures that are taken primarily to protect a country`s national economy. They usually reduce the amount of goods and services that can be imported. These barriers to trade take the form of customs duties or taxes, although Member States do not remove barriers between them. In addition, preferential trade zones have no common barriers to foreign trade. According to Noah Chomsky, RTAs have little impact on reducing tariffs, which he says are already low between major trading partners. [16] Instead of promoting free trade, he argues that RTAs are highly protectionist, cementing investors` rights and effectively increasing tariffs by recognizing patents with huge implications for economies. [17] The potential positive impact of RTAs on economies is highly controversial. [2] Because of their immense scope and depth, RTAs have been called “mega-regional arrangements” and raise concerns about democratic governance, legality and economic distribution.
In addition, RTAs exclude third parties, raising concerns from a global justice perspective. Market participants, including entire countries excluded from agreements concluded by other parties, may face economic difficulties as a result of trade diversion caused by such agreements. [18] See Jan Klabbers, Megaregionals: Protecting Third Parties? 3 (Institute for Law and Justice, MegaReg Forum Paper 2016/1, 2016), iilj.org/wp-content/uploads/2016/08/Klabbers_IILJ-MegaRegForumPaper_2016-1.pdf. Trade diversion is also spread over equally developed industrialized countries. The oft-cited example by Howse of Japanese products marketed outside the EU market as a result of TTIP`s proposed changes to technical standards suggests that trade in advanced electronic devices could be diverted from Japan to the EU or to another equally developed eligible country producing such advanced electronic goods; However, developing countries may not be able to produce such products. [81] In addition, in citrus, trade in the product was diverted from the United States to the poorest Mediterranean countries. [82] Offering remedies to trade diversion in all countries can therefore be counterproductive in terms of the gradual distribution of resources and create new disputes between equally (un)developed countries without contributing to global equality. Policymakers recognize the need for regional trade agreements to be consistent with multilateral rules and the need to ensure coherence among regional agreements and between regional and multilateral systems. Some countries are even negotiating RTAs through the express intention of setting a precedent for the development of future multilateral rules, while others see deeper action in regional partnerships as a way to complement the multilateral system. In both cases, there are good practices for “supportive multilateral” practices that can help promote convergence. A developing country or company may therefore be better off if it does not act under the terms of the regional free trade agreement. It may be preferable not to join an RTA and to continue trading under the existing conditions of WTO multilateral rules.
In other words, what matters from the point of view of the progressive distribution of resources are the specific conditions of a transaction, not participation in an RTA, as Caruso suggests. Therefore, participation in a particular trade regime does not automatically contribute to the objective of a progressive allocation of resources. Regional trade agreements refer to a treaty signed by two or more countries to promote the free movement of goods and services across the borders of its members. The agreement contains internal rules which the Member States follow among themselves. When dealing with third countries, there are external rules to which members adhere. [6] Voir Fabian Bohnenberger, Mega-regional Agreements and Global Trade Governance: Ensuring Openness and Inclusiveness in an Increasingly Complex System, Bridges Afr., mai 2016, 21, www.ictsd.org/bridges-news/bridges-africa/news/mega-regional-agreements-and-global-trade-governance-ensuring. . .