Regional trade agreements
Foreword
Technology has always propelled trade. From the invention of the steam engine and steamship in the 1700s the popularization of the standard shipping container in the 1950s and the rise of the internet in the 1990s technology has over the centuries profoundly changed the way we trade. Today emerging technologies and digitalization are changing trade at a speed much faster than before – leading to both opportunities and challenges.
The promise of TradeTech
TradeTech – the set of technologies that enables global trade to become more efficient inclusive and sustainable – is multifaceted from trade facilitation to efficiency gains and reduced costs to greater transparency and resilience of supply chains. Although technological innovation exists the major challenge to the global adoption of TradeTech will be building international policy coordination. Trade agreements can play a key role. Despite ongoing efforts to introduce digital trade provisions in trade agreements many unseized opportunities and unexplored policies remain. This joint World Economic Forum and WTO publication explores how trade agreements could be leveraged to advance the adoption of digital technologies and trade digitalization.
Global interoperability of data models for trade documents and platforms
In a digital environment for parties to seamlessly exchange data and documents all information needs to be clearly defined and unambiguous (World Economic Forum/UNECE 2017). Reaching agreement on both the semantic content (i.e. data definitions such as whether the ‘port of unlading’ is the same as the ‘port of discharge’) and the syntax of data (i.e. data structure or format) is critical to ensure trading partners wanting to exchange information understand it in the same way.
Conclusion
In the Fourth Industrial Revolution technological development and adoption is growing exponentially. The recent COVID-19 pandemic has accelerated the societal adoption and acceptance of digital technologies and has made one thing clear – the future of trade is digital and the 5 Gs of TradeTech are the engines.
Executive summary
The promise of TradeTech – the set of technologies that enables global trade to become more efficient inclusive and sustainable – is multifaceted from trade facilitation to efficiency gains and reduced costs to greater transparency and resilience of supply chains. Of particular interest for this publication is the potential of artificial intelligence (AI) blockchain and distributed ledger technology (DLT) and the internet of things (IoT) to shape the global trade ecosystem.
Global legal recognition of electronic transactions and documents
On average a cross-border transaction requires the exchange of 36 documents and 240 copies (Fletcher 2019). A shipment of roses from Kenya to Rotterdam can generate a pile of paper 25 cm high and the cost of handling it can be higher than the cost of moving the containers (Allison 2016).
Global digital identity
Identity and trust lie at the core of each trade interaction. As global value chains become increasingly digital organizations need to ensure that they can trust the digital identity of legal and physical persons1 or products they deal with and can efficiently link that digital identity with a real organization specific product or device (see Box 17).
Global trade rules access and computational law
Businesses operate in an environment of increasing legal complexity. At a global level trade compliance is particularly time consuming and costly as enterprises need to be aware of and comply with rules under different international agreements as well as meet their contractual obligations.
The Evolution of Gender-Related Provisions in Regional Trade Agreements
Regional Trade agreements (RTAs) are sometimes considered as laboratories in which new types of provisions are negotiated to address recent trade-related issues. Although the inclusion of gender-related provisions in RTAs is not a recent phenomenon only a limited but increasing number of RTAs refer explicitly to gender-related issues. These gender-related provisions are highly heterogeneous and differ in terms of location in the RTA language scope and commitments. Some of the most detailed gender-related provisions are found in stand-alone chapters on gender. Cooperation provisions on gender-related issues including labour health and social policy remain the most common type of gender-related provisions found in RTAs.
Hold the Line: The Evolution of Telecommunications Provisions in Regional Trade Agreements
Based on the first comprehensive mapping of telecommunications provisions telecommunications in regional trade agreements (RTAs) this paper shows that telecommunications provisions in RTAs have evolved and expanded significantly over the years. While some provisions focus on information and communications technologies (ICT) infrastructure policy and investment other provisions address telecommunications services as well as standards and conformity assessment procedures of ICT equipment. The most detailed and comprehensive telecommunications provisions are found in stand-alone chapters sections or annexes on telecommunications services. A network analysis further reveals that telecommunications provisions remain highly heterogenous.
The Treatment of Medical Products in Regional Trade Agreements
The WTO Secretariat has published a new report on the treatment of medical products in regional trade agreements (RTAs) amid current supply shortages caused by the COVID-19 pandemic. The report examines the extent medical products are traded among preferential partners and the difference in liberalization rates within and outside these trade agreements.
Investment Provisions in Preferential Trade Agreements: Evolution and Current Trends
Our analysis covers 230 PTAs of which 111 contain substantive provisions on investment. Over the past 60 years or so States have created an extensive network of Bilateral Investment Treaties (BITs) that govern and protect international investment. The number of BITs concluded annually continues to increase although this rate has tapered off over the past decade.
Competition policy, trade and the global economy: Existing WTO elements, commitments in regional trade agreements, current challenges and issues for reflection
Competition policy today is an essential element of the legal and institutional framework for the global economy. Whereas decades ago anti-competitive practices tended to be viewed mainly as a domestic phenomenon most facets of competition law enforcement now have an important international dimension. Examples include: the investigation and prosecution of price fixing and market sharing arrangements that often spill across national borders and in important instances encircle the globe; multiple recent prominent cases of abuses of a dominant position in high-tech network industries; important current cases involving transnational energy markets; and major corporate mergers that often need to be simultaneously reviewed by multiple jurisdictions.
How Does the Regular Work of WTO Influence Regional Trade Agreements?
This paper illustrates how the work of the WTO's standing committees is fuelling regulatory cooperation between WTO members and inspiring RTA negotiators.
Provisions on Electronic Commerce in Regional Trade Agreements
This paper reviews the different types of provisions explicitly addressing electronic commerce (e-commerce) in regional trade agreements (RTAs). The analysis covers the 275 RTAs currently in force and notified to the WTO as of May 2017.
Provisions on Small and Medium-Sized Enterprises in Regional Trade Agreements
This paper reviews the different types of provisions explicitly addressing small and medium enterprises (SMEs) including micro firms (MSMEs) in regional trade agreements (RTAs). The analysis covers the 270 RTAs currently in force and notified to the WTO as of April 2016. The analysis shows that half of all the notified RTAs namely 136 agreements incorporate at least one provision mentioning explicitly SMEs. These SMEs-related provisions are highly heterogeneous and differ in terms of location in the RTA language scope and commitments. Many of the SMEs related provisions are only found in a single or couple of RTAs. A limited but increasing number of RTAs incorporate specific provisions in dedicated articles or even chapters on SMEs. Although the number of detailed SMEs-related provisions included in a given RTA has tended to increase in recent years most SMEs-related provisions remain couched in best endeavour language. The two most common categories of SMEs-related provisions found in RTAs are provisions (1) promoting cooperation on SMEs and (2) specifying that SMEs and/or programs supporting SMEs are not covered by the RTAs' obligations provisions. Other types of SMEs-related provisions incorporated in a limited number of RTAs refer inter alia to government procurement trade facilitation electronic commerce intellectual property or transparency.
Typology of Environment-Related Provisions in Regional Trade Agreements
The last 25 years have witnessed a rapid increase in regional trade agreements (RTAs). Although RTAs generally aim at lowering tariff and non-tariff trade barriers an increasing number of trade agreements extend their scope to cover specific policy areas such as environmental protection and sustainable development. This paper establishes a comprehensive typology and quantitative analysis of environment-related provisions included in RTAs. The analysis covers all the RTAs currently into force that have been notified to the WTO between 1957 and May 2016 namely 270 trade agreements. While environmental exceptions along with environmental cooperation continue to be the most common types of environment-related provisions many other different types of provisions are incorporated in an increasing number of RTAs. The common feature of all environment-related provisions including environmental exceptions is their heterogeneity in terms of structure language and scope.
A Survey of Investment Provisions in Regional Trade Agreements
The liberalization and protection of investment flows has become an increasingly indispensable pillar of economic integration. The objective of this study is to contribute to a better understanding of the ways in which RTAs achieve such liberalization and protection. To this end we have surveyed the investment provisions contained in 260 RTAs notified to the WTO by 31 December -2015- and in force on that date. More than half of these RTAs contain investment chapters though they vary in terms of their substantive scope and coverage. The main categories of investment provisions in RTAs reviewed in the paper include the definitions of investment and investor investment liberalization investment protection and ISDS. Also included in our analysis are provisions supporting the investment framework host state flexibilities investment promotion as well as provisions on sustainable and socially responsible investment.
Mapping of dispute settlement mechanisms in regional trade agreements – innovative or variations on a theme?
Regional trade agreements (RTAs) have become an indelible feature of the international trading landscape. The number of RTAs has not only increased exponentially over the years but their content has also evolved over time. In particular RTAs have become quite expansive in their regulatory coverage moving from the reduction of tariffs to behind- the border issues such as the harmonization of standards and further to so- called “WTO- extra” (WTO- X) issues such as competition and investment. Moreover the enforcement mechanisms established by RTAs have increasingly shifted from politically oriented procedures to more sophisticated legalistic forms of dispute settlement.
Some conclusions
Regional trade agreements and the multilateral trading system are not inherently incompatible approaches to trade liberalization. This is a fact acknowledged by the GATT and WTO rule books which permit the formation of RTAs. The conditions placed on RTAs through GATT and WTO rules are meant to ensure that they are not more discriminatory than necessary (as defined by the rules) and do not create additional barriers to trade for third parties.
Trade facilitation under the regional trade agreement umbrella: Origins and evolution
The proliferation of regional trade agreements (RTAs) over the past few decades has sparked intense debate on their purpose structure and impact. Trade facilitation (TF) aspects did not figure too prominently in these discussions and have only recently attracted more attention. For many years they merely played a marginal role both in the agreements themselves and in the related analysis.
Services rules in regional trade agreements: how diverse or creative are they compared to the multilateral rules?
Services trade represents about one- fifth of world trade as measured by the balance of payments and about one- third based on commercial presence/ establishment. Services have not escaped the recent flurry of regional trade agreements (RTAs) but as a relatively new subject in the trade negotiations arena they have been less affected by this trend than trade in goods. As of December 2014 there were 122 RTAs with a services component that had been notified to the WTO compared with 235 agreements with a goods component. The growing importance of RTAs in services raises questions about the rules on services in these agreements and this chapter tries to answer two somewhat provocative questions.
Regional trade agreements: Recent developments
Regional trade agreements (RTAs) have increased rapidly in recent years and have become a key feature of trade policy for all WTO members. As at 15 October 2015 265 RTAs had been notified to the WTO and were in force; the estimate is that around a hundred RTAs are in force but have not been notified to the WTO and that an equal number are currently being negotiated . In addition to increasing in number modern RTAs are becoming more sophisticated in their content and coverage. Not only do most include market access commitments in goods and services as well as accompanying provisions on rules of origin trade remedies (anti-dumping countervailing and safeguards) but increasingly provisions on investment intellectual property rights competition and labour and environment are found in many RTAs notified to the WTO in recent years.
Regional Trade Agreements and the Multilateral Trading System
The book contains a collection of studies examining trade- related issues negotiated in regional trade agreements (RTAs) and how RTAs are related to the WTO’s rules. While previous work has focused on subsets of RTAs these studies are based on what is probably the largest dataset used to date and highlight key issues that have been negotiated in all RTAs notified to the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). New rules within RTAs are compared to rules agreed upon by WTO members. The extent of their divergences and the potential implications for parties to RTAs as well as for WTO members that are not parties to RTAs are examined. This volume makes an important contribution to the current debate on the role of the WTO in regulating international trade and how WTO rules relate to new rules being developed by RTAs.
Do regional anti- dumping regimes make a difference?
The conclusion of regional trade agreements (RTAs) that liberalize trade is often accompanied by the negotiation of rules and disciplines safeguarding the ability of the parties to take defensive measures temporarily restricting access by other RTA parties to their markets thus temporarily stepping back from opening markets. Accordingly in special circumstances and under specific conditions certain defence mechanisms can be used by governments for instance when facing what is described as a situation of “unfair trade” if penetration by foreign products into domestic markets causes damage or injury to the domestic industry.
Regional Trade Agreements and the Multilateral Trading System
This volume contains a collection of studies examining trade-related issues negotiated in regional trade agreements (RTAs) and how RTAs are related to the WTO's rules. While previous work has focused on subsets of RTAs these studies are based on what is probably the largest dataset used to date and highlight key issues that have been negotiated in all RTAs notified to the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). New rules within RTAs are compared to rules agreed upon by WTO members. The extent of their divergences and the potential implications for parties to RTAs as well as for WTO members that are not parties to RTAs are examined. This volume makes an important contribution to the current debate on the role of the WTO in regulating international trade and how WTO rules relate to new rules being developed by RTAs.
Cross- cutting issues in regional trade agreements: Sanitary and phytosanitary measures
There has been a proliferation of regional trade agreements (RTAs) since the early 1990s. As of 1 December 2014 General Agreement on Tariffs and Trade (GATT)/ WTO members had notified nearly 600 RTAs counting goods and services notifications separately to the WTO. Out of these RTAs 256 are currently in force. Many of the RTAs contain provisions regarding sanitary and phytosanitary (SPS) measures that conform to provisions contained in the WTO Sanitary and Phytosanitary Agreement (hereafter “SPS Agreement”). Other RTAs currently in force to determine provisions go beyond the SPS Agreement requirements. This chapter summarizes whether the key provisions of the SPS Agreement are incorporated into RTAs and highlights trends where the RTAs provisions go beyond the provisions in the SPS Agreement.
Market access provisions on trade in goods in regional trade agreements
The goal of this study is to provide a comprehensive overview of the market access provisions that apply to trade in goods contained in regional trade agreements (RTAs) notified to the WTO and in force. Although a number of studies have looked at market access provisions in trade in goods much of this work has been limited to subsets of RTAs particularly plurilateral RTAs involving three or more parties. Th e goal of this study is to expand beyond the more commonly studied RTAs and to include all RTAs notified to the WTO for which data are available. A previous study published in 2012 surveyed the market access provisions applicable in merchandise trade for 193 RTAs in force at that time. Since then the number of RTAs has continued to grow. As of December 2014 more than 250 RTAs containing provisions on trade in goods have been notified to the WTO and are in force. The majority of these RTAs – more than 80 per wto_cent – were notified to the WTO in the last ten years or so.
TBT Provisions in Regional Trade Agreements
This paper investigates whether TBT provisions included in RTAs differ from those under the WTO TBT Agreement and if they do whether they entail broader commitments. Our analysis covers 238 RTAs of which 171 include at least one provision and focuses on the provisions on technical regulations conformity assessment procedures transparency dispute settlement marking and labelling and sector-specific commitments. We find that all RTAs signed since 2010 systematically include TBT provisions and that the most frequent provisions are those referring to the TBT Agreement and transparency. Moreover even if there are RTAs that include new or broader commitments than the TBT Agreement our study shows that their number remains very limited. For instance relatively few RTAs have included provisions to better implement WTO provisions in the area of transparency or provisions requiring the equivalence or harmonization of technical regulations among the parties or even the recognition of conformity assessment results. RTAs with a dispute settlement provision that applies exclusively to TBT issues are also very few. These RTAs give in general exclusive jurisdiction to the WTO DSM over TBT related disputes. Finally also only a minority of RTAs include provisions on new issues such as marking and labelling or sector-specific provisions typically for electric and electronic products pharmaceuticals or vehicles.
Intellectual Property Provisions in Regional Trade Agreements
This is a revision and update of "Intellectual Property Provisions in Regional Trade Agreements" by Valdés and Runyowa (2012). This paper adjusts the methodology applied to assess the intellectual property (IP) provisions contained in regional trade agreements (RTAs) and the aggregation of such provisions into groups; it also updates the RTAs surveyed from 194 in November 2010 to 245 in February 2014. New information contained in this revision relates to three IP-related investment and non-violation provisions in RTAs. The methodological revisions and new information result in changes to the assessment of the IP content of certain RTAs while the update reveals a growing and increasingly complex network of RTAs with IP content. This revision also provides new insights into possible improvements to the methodological toolkit for analysing IP in RTAs. The paper assembles detailed information about the IP provisions contained in active RTAs notified to the WTO. The goal was to expand beyond the more commonly studied RTAs to review the full array of agreements notified to the WTO and thus to enable consideration of the implications of this diverse range of norm-setting activity for the multilateral system. Mapping of the IP content in RTAs involving parties from all regions and levels of development is necessary to better understand crosscutting trends in RTAs and how all the parts of the international IP framework influence each other. The methodology followed involved surveying each RTA in the sample to determine whether it made reference to any of 32 different IP-related provisions. Two of the three IP-related provisions new to this revision and update are investment-related IP provisions while the other concerns dispute settlement for non-violation claims. The relevant provisions are discussed in detail and summary statistics used to identify patterns over time and by continent level of economic development and selected traders. The number of IP provisions in each RTA is then used to classify agreements according to their level of IP content. The first significant identified trend is the acceleration in the conclusion of RTAs with IP provisions after the creation of the WTO and the entry into force of the WTO TRIPS Agreement. A significant proportion of those RTAs contain some type of IP provision but the number and type of those provisions vary widely across agreements. A majority of the RTAs surveyed include general IP provisions while a smaller proportion contains explicit provisions on specific fields of IP law such as geographical indications patents trademarks and copyright. The inclusion of even more detailed provisions elaborating on specific areas of IP law is less common. As a result the actual IP content of RTAs differs greatly across the sample with slightly less than half of these agreements found to havesubstantive IP standards that can be classified as moderate or high. The RTAs containing a high level of IP provisions are characterized by a hub-and-spoke architecture in which the wording and structure of IP provisions converged around the RTAs of specific countries or blocs. The largest systems are grouped around the EFTA the European Union and the United States. The hub-and-spoke architecture seems to have encouraged the convergence of domestic IP regimes among the respective RTA signatories. The mechanics of this potentially crucial process and its economic implications require further investigation.
Trade Facilitation Provisions in Regional Trade Agreements Traits and Trends
The paper first surveys the Trade Facilitation landscape at the regional level and analyses the main forces shaping it. It identifies key factors driving regional Facilitation approaches examining their priorities features and underlying philosophies. The study also highlights significant trends in regional Trade Facilitation provisions and analyses their implications. The paper then compares regional and multilateral initiatives looking at areas of convergence and divergence and highlighting where potential gaps exist. It analyses negotiating positions in the respective frameworks and discusses both the benefits and limitations of the resulting Trade Facilitation provisions. Examining the impact of the recently concluded WTO Agreement the study highlights its potential value added.