Do bilateral and regional trading agreements not violate MFN, the fundamental principle of WTO?
There are more than 200 regional and bilateral trading agreements. There are agreements between countries of Europe, North America, Asia, Africa and Latin America. There are bilateral agreements between the US and many countries such as Chile, South Korea and Jordan. Interestingly, the WTO permits such trading agreements. Article XXIV, which actually violates Article I on the MFN, says that regional agreements are permitted as long as tariffs for those outside the agreement are not raised as a consequence. Regional trading agreements(RTA) can be of broadly two categories: customs unions and free trade areas. Countries in a customs unions have a zero tariffs internally and a unified tariff against the rest of the world. A free trade area(FTA) is one in which countries maintain their own tariffs against non-member countries while having zero tariffs with members of the FTA. In other words, they do not have a unified tariff against the rest of the world. The European Economic Community (E
Related Questions
- Can bilateral and plurilateral trade agreements continue to exist under the WTO and does the WTO control such agreements?
- How do regional trade agreements fit in the WTO framework? Can these agreements go against WTO agreements?
- Do bilateral and regional trading agreements not violate MFN, the fundamental principle of WTO?
