WTO Seminar on

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The Changing Landscape of Regional Trade
Agreements
WTO Seminar on Regional Trade Agreements and the
WTO Geneva, 14 November 2003
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• Overview
• The drive towards the conclusion of RTAs
  continues
• unabated.
• 33 RTAs have been notified to the WTO since
• November 2001. If the current trend continues
  we
• estimate that 300 RTAs will be in force in
  2007.
• RTAs can clearly help countries integrate into
  the
• MTS, but are a fundamental departure from the
• guiding principle of non-discrimination of the
  WTO.
• Are RTAs a building block or stumbling block?
• Need to look at the changing landscape of RTAs

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• Main Trends Identified
• Countries traditionally favouring MFN
  liberalization
• are increasingly being drawn into RTAs.
• Those which have been engaged in RTAs for some
• time are looking further afield for
  cross-regional
• partners.
• Mega-blocks such as the FTAA or Euro-
• Mediterranean FTA are under negotiation.

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RTAs notified to the GATT/WTO (1948-2003) in
force and non-notified RTAs
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RTAs in force, as of October 2003, by type of
agreement
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RTAs Configuration
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Cross Regional RTAs are a growing phenomenon
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• Regional and cross-regional developments
• The greatest concentration of RTAs is in
  Europe,
• where over 100 RTAs are in force.
• The main focus of RTA activity has shifted away
• from Europe in the last two years towards Asia
• Pacific.
• APEC members, in particular, have been among
• the most active participants in RTAs.

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Motivations why do countries engage in RTAs?

• Economic Rationale
• search for larger markets
• deeper integration
• defensive necessity
• lock out competition
• lock in investment
• More secure access to
• developed markets than
• GSP programs

• Political Reasons
• increase bargaining power
• prevent backsliding on
• political/economic reforms
• ensure or reward political
• support

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Effects of RTAs on the multilateral system are
manifold

• Negative
• strains negotiating capacity
• dampens enthusiasm for
• multilateral negotiations
• creates vested interests
• labyrinthine rules of origin
• trade and investment
• diversion
• weakest countries left out

• Positive
• economies of scale
• laboratories for change
• provide competition
• attract FDI
• allow countries to hone
• negotiating skills

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• RTAs in the WTO context
• Long-standing controversy about the
  interpretation
• of provisions relating to RTAs
• Impasse in the current examination of
  agreements.
• Negotiations launched at Doha have resulted in
• fruitful discussions on transparency, but no
   early
• harvest  was achieved in time for Cancun.
• Informal discussions on the more controversial
• systemic issues began in June.