International and

Regional
Agreements
affecting Trade
World Trade Organization (WTO) is the only
international organization dealing with the
global rules of trade between nations. Its
main function is to ensure that trade flows as
smoothly, predictably and freely as possible.
The World Trade Organization came into being in
1995. One of the youngest of the international
organizations, the WTO is the successor to the
General Agreement on Tariffs and Trade (GATT)
established in the wake of the Second World War.
Location: Geneva, Switzerland
Established:1 January 1995

Created by: Uruguay Round negotiations
(1986-94)
Membership: 159 countries
on 2 March 2013
Budget: 196 million Swiss francs for 2011
Secretariat staff: 640

Head: Roberto Azevdo
(Director-General)
Functions:
Administering WTO trade agreements
Forum for trade negotiations
Handling trade disputes
Monitoring national trade policies
Technical assistance and training for
developing countries
Cooperation with other international
organizations
The WTO agreements are lengthy and
complex because they are legal texts
covering a wide range of activities.
They deal with: agriculture, textiles
and clothing, banking,
telecommunications, government
purchases, industrial standards and
product safety, food sanitation
regulations, intellectual property, and
much more.
Trade in early 20
th
century.
Nondiscrimination
the elimination of discriminatory treatment in international trade relations
A country to accord, immediately and unconditionally,
any advantage, favor, privilege or immunity it grants to
any product of any other country to the like product of
all other countries, with respect to (i) customs duties
and charges levied on imports and exports or on the
international transfer of payments for imports or
exports, (ii) the method of levying such duties and
charges, (iii) all rules and formalities in connection with
importation and exportation, and (iv) internal taxation
and regulations affecting the sale and use of imported
products.
Trade liberalization
The removal or reduction of restrictions or
barriers on the free exchange of goods
between nations. This includes the removal or
reduction of both tariff (duties and
surcharges) and non-tariff obstacles (like
licensing rules, quotas and other
requirements).
The principles
The trading system should be ...
without discrimination a country should not discriminate
between its trading partners (giving them equally
most-favoured-nation or MFN status); and it should
not discriminate between its own and foreign products,
services or nationals (giving them national treatment);
The principles
The trading system should be ...
freer barriers coming down through negotiation;
The principles
The trading system should be ...
predictable foreign companies, investors and governments should be
confident that trade barriers (including tariffs and non-tariff barriers) should
not be raised arbitrarily; tariff rates and market-opening commitments are
bound in the WTO;
The principles
The trading system should be ...
more competitive discouraging unfair practices such as
export subsidies and dumping products at below cost
to gain market share;

The principles
The trading system should be ...
more beneficial for less developed countries giving them
more time to adjust, greater flexibility, and special privileges
Why most-favoured?
This sounds like a contradiction. It
suggests special treatment, but in
the WTO it actually means non-
discrimination treating virtually
everyone equally.
In February 1997 an agreement was reached on
telecommunications services, with 69
governments agreeing to wide-ranging
liberalization measures.
In the same year, 40 governments successfully
concluded negotiations for tariff-free trade in
information technology products, and 70
members concluded a financial services deal
covering more than 95% of trade in banking,
insurance, securities and financial information.
In 2000, new talks started on agriculture and
services. These have now been incorporated into
Doha Development Agenda (DDA), launched at
the fourth WTO Ministerial Conference in Doha,
Qatar, in November 2001.
The agenda adds negotiations and other work on
non-agricultural tariffs, trade and environment,
WTO rules such as anti-dumping and subsidies,
investment, competition policy, trade facilitation,
transparency in government procurement,
intellectual property, etc.
GATT is now the WTOs principal rule-book for
trade in goods. The Uruguay Round also
created new rules for dealing with trade in
services, relevant aspects of intellectual
property, dispute settlement, and trade policy
reviews. The complete set runs to some
30,000 pages consisting of about 30
agreements and separate commitments
(called schedules) made by individual
members in specific areas such as lower
customs duty rates and services market-
opening.
The South Asian Association for Regional
Cooperation (SAARC) is
in economic and geopolitical cooperation among eight
member nations that are primarily located in South Asia
continent. Its secretariat is headquartered
in Kathmandu, Nepal.
South Asian Free Trade Area
SAFTA was envisaged primarily as the first step towards the
transition to a South Asian Free Trade Area (SAFTA) leading
subsequently towards a Customs Union, Common Market and
Economic Union. In 1995, the Sixteenth session of the Council of
Ministers (New Delhi, 1819 December 1995) agreed on the need
to strive for the realisation of SAFTA. The Tenth SAARC Summit
(Colombo, 2931 July 1998) decided to set up a Committee of
Experts (COE) to draft a comprehensive treaty framework for
creating a free trade area within the region.
The SAFTA Agreement
was signed on
6 January 2004 during
Twelfth SAARC Summit held
in Islamabad, Pakistan.
The Agreement entered into
force on 1 January 2006, and
the Trade Liberalization Programme
commenced from 1 July 2006.
Under this agreement,
SAARC members will bring their duties down
to 20 per cent by 2009.
Association of Southeast Asian Nations
ASEAN
Established on 8 August 1967
ASEAN Member States:
1. Brunei Darussalam
2. Cambodia
3. Indonesia
4. Lao PDR
5. Malaysia
6. Myanmar
7. Philippines
8. Singapore
9. Thailand
10. Viet Nam
The ASEAN Free Trade Area (AFTA)
ASEAN Member Countries have made significant
progress in the lowering of intra-regional tariffs
through the Common Effective Preferential Tariff
(CEPT) Scheme for AFTA. More than 99 percent of
the products in the CEPT Inclusion List (IL) of
ASEAN-6, comprising Brunei Darussalam,
Indonesia, Malaysia, the Philippines, Singapore and
Thailand, have been brought down to the 0-5
percent tariff range.
The AANZFTA is a comprehensive and single-
undertaking economic agreement that opens up
and creates new opportunities for the 600 million
peoples of ASEAN, Australia and New Zealand
which have a combined economic output of USD
2.65 trillion via a platform of a more liberal,
facilitative and transparent market access. The
Agreement was signed on 27 February 2009 in
Thailand. It entered into force on 1 January 2010.
THE EUROPEAN UNION
The European Union (EU) is the oldest and
most significant economic integration
scheme, involving twenty-seven Western and
Eastern European countries: Austria,
Belgium, Bulgaria, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the
Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, and the
United Kingdom.