The recent surge in signing Free Trade Agreements (a form of Regional Trade Agreement) is a GLOBAL PHENOMENON. As on date, 197 notified RTAs are in force globally. Except Mongolia, all other WTO members are already part of at least one Free Trade Agreement existing in any part of the world. WTO Members are permitted to enter into such arrangements under specific conditions, which are spelled out in three sets of rules: Article XXIV of GATT, Enabling Clause referring to preferential trade arrangements in trade in goods between developing country Members and Article V of GATS governing the conclusion of RTAs in the area of trade in services, for both developed and developing countries.
The objective of signing FTAs is to open up the markets among a limited number of partner countries and increase trade among themselves in a free and fair atmosphere and also include broader foreign policy aims such as political and security considerations. Reduction in Customs Tariff gradually to zero level is an attached objective to the FTAs.
Countries participating in RTAs seek to secure access to large markets. Access to large markets permits opportunities to even smaller countries to attract more domestic and foreign investment. A regional agreement can also help with region specific issues such as environment, border controls, transit, migration or movement of labour or development of trans-boundary infrastructure. RTAs are a major and perhaps an irreversible feature of today's multilateral trading system.
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