Preferential Trade Agreements

Abstract

The WTO stifles the possibility of developing countries to utilize trade as a means to economic growth and development. Requirements to implement WTO rules are at odds with development ideals- and countries simply try to implement these rules in such way that can give them more opportunities, profits and contribution to the attainment of development goals. One important trend in recent years in the field of trade policy is the proliferation of preferential trade agreements (PTAs). Normally, PTAs provide for greater levels of liberalization among the parties than what the countries may have committed to at the WTO in terms of tariffs or services liberalization. The new generation of PTAs tend to contain disciplines which go beyond relevant WTO disciplines, or regulate issues in respect of which there are no WTO disciplines. One example is the agreement that the European Union has signed with South-East European countries. This agreement deviate from the purely trade-focused purpose but it includes other broader intentions. But still many developing countries are addressing the fact that they are not benefiting from the WTO system and they are claiming that the cost of adjustment to its rules is higher than the advantage of being part of the WTO. One of the main problems addressed by developing countries is the reciprocity of the market access concession. The WTO should face this problem and try to find suitable solutions with minor costs for the members.

DOI: 10.5901/ajis.2015.v4n3s1p436