Advantages Of Regional Trade Agreements

Using the term `regional`, it should be remembered that trade agreements are international – member states of a trade pact do not need to be in a neighbouring country. As a result, regional trade agreements can cover large geographic areas. Full integration of Member States is the last level of trade agreements. Regional trade agreements are multiplying and changing their nature. In 1990, 50 trade agreements were in force. In 2017, there were more than 280. In many trade agreements, negotiations today go beyond tariffs and cover several policy areas relating to trade and investment in goods and services, including rules that go beyond borders, such as competition policy, public procurement rules and intellectual property rights. ATRs, which cover tariffs and other border measures, are “flat” agreements; THE RTAs, which cover more policy areas at the border and at the back of the border, are “deep” agreements. Regional trade agreements refer to a treaty signed by two or more countries to promote the free movement of goods and services beyond the borders of its members. The agreement contains internal rules that Member States comply with each other. As far as third countries are concerned, there are external rules to which members comply. Deep trade agreements are an important institutional infrastructure for regional integration.

They reduce business costs and set many rules in which economies are active. If designed effectively, they can improve political cooperation between countries and thus promote international trade and international investment, economic growth and social well-being. The World Bank Group`s research concludes that the pros and cons of free trade agreements affect employment, business growth and living standards: one of the main benefits of regional trade agreements is the removal of trade barriers. This is an advantage because it acts as a catalyst for more trade and growth, as states have easier access to foreign markets. RTAs are, by their nature, much smaller than mega-regional trade agreements and extremely extensive global trade agreements. This makes it much easier and quicker to successfully conclude a regional trade agreement because there are fewer parties involved. International relations and peacekeeping are another advantage of regional trade agreements. If the common interests of countries are protected by a mutually beneficial pact, they are less likely to break the pact and come into conflict, at the risk of harming their respective economies.