PPT: Trade Negotiations | Geography for UPSC CSE PDF Download

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Trade Negotiations
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Trade Negotiations
Understanding Regional Trade Agreements (RTAs)
Regional Trade Agreements (RTAs) are pacts among countries aiming to lessen trade barriers, such as 
tariffs and quotas, to facilitate smoother trade between them.
1
Unilateral Trade Agreements
Importing country offers trade incentives to an exporting country to stimulate economic activities. 
Example: Generalized System of Preferences (GSP).
2
Bilateral Agreements
Establish trade rules between two countries, two blocs, or a bloc and a country. Examples: EU-South 
Africa Free Trade Agreement and ASEAN3India Free Trade Area.
As of February 1, 2021, there were 339 RTAs in effect.
Page 3


Trade Negotiations
Understanding Regional Trade Agreements (RTAs)
Regional Trade Agreements (RTAs) are pacts among countries aiming to lessen trade barriers, such as 
tariffs and quotas, to facilitate smoother trade between them.
1
Unilateral Trade Agreements
Importing country offers trade incentives to an exporting country to stimulate economic activities. 
Example: Generalized System of Preferences (GSP).
2
Bilateral Agreements
Establish trade rules between two countries, two blocs, or a bloc and a country. Examples: EU-South 
Africa Free Trade Agreement and ASEAN3India Free Trade Area.
As of February 1, 2021, there were 339 RTAs in effect.
Different Types of RTAs 
1
Regional Preferential Trade Agreements
Group of countries reducing trade barriers on a reciprocal and 
preferential basis for member countries only. Example: Global 
System of Trade Preferences among Developing Countries (GSTP).
2
Trading Blocs
Countries with free trade agreement among themselves that may 
apply a common external tariff to non-member countries. Examples: 
Arab League (AL) and European Free Trade Association (EFTA).
3
Free Trade Areas
Member countries eliminate all tariff and quota barriers on trade 
among themselves. Example: ASEAN3India Free Trade Area (AIFTA), 
which came into force on August 1, 2005.
Page 4


Trade Negotiations
Understanding Regional Trade Agreements (RTAs)
Regional Trade Agreements (RTAs) are pacts among countries aiming to lessen trade barriers, such as 
tariffs and quotas, to facilitate smoother trade between them.
1
Unilateral Trade Agreements
Importing country offers trade incentives to an exporting country to stimulate economic activities. 
Example: Generalized System of Preferences (GSP).
2
Bilateral Agreements
Establish trade rules between two countries, two blocs, or a bloc and a country. Examples: EU-South 
Africa Free Trade Agreement and ASEAN3India Free Trade Area.
As of February 1, 2021, there were 339 RTAs in effect.
Different Types of RTAs 
1
Regional Preferential Trade Agreements
Group of countries reducing trade barriers on a reciprocal and 
preferential basis for member countries only. Example: Global 
System of Trade Preferences among Developing Countries (GSTP).
2
Trading Blocs
Countries with free trade agreement among themselves that may 
apply a common external tariff to non-member countries. Examples: 
Arab League (AL) and European Free Trade Association (EFTA).
3
Free Trade Areas
Member countries eliminate all tariff and quota barriers on trade 
among themselves. Example: ASEAN3India Free Trade Area (AIFTA), 
which came into force on August 1, 2005.
Customs Unions
Countries eliminate tariffs on trade among themselves while 
maintaining a common external tariff for non-member countries. 
Examples: European Union (EU), Gulf Cooperation Council (GCC), 
and Southern Common Market (MERCOSUR).
Common Market
Allows free movement of goods and factors of production such as 
labor, capital, and other resources. Examples: European Union (EU) 
and Association of Southeast Asian Nations (ASEAN).
Economic and Monetary Union
Member countries share a common currency, necessitating strong 
convergence of macroeconomic policies. Example: European Union 
with the euro.
Page 5


Trade Negotiations
Understanding Regional Trade Agreements (RTAs)
Regional Trade Agreements (RTAs) are pacts among countries aiming to lessen trade barriers, such as 
tariffs and quotas, to facilitate smoother trade between them.
1
Unilateral Trade Agreements
Importing country offers trade incentives to an exporting country to stimulate economic activities. 
Example: Generalized System of Preferences (GSP).
2
Bilateral Agreements
Establish trade rules between two countries, two blocs, or a bloc and a country. Examples: EU-South 
Africa Free Trade Agreement and ASEAN3India Free Trade Area.
As of February 1, 2021, there were 339 RTAs in effect.
Different Types of RTAs 
1
Regional Preferential Trade Agreements
Group of countries reducing trade barriers on a reciprocal and 
preferential basis for member countries only. Example: Global 
System of Trade Preferences among Developing Countries (GSTP).
2
Trading Blocs
Countries with free trade agreement among themselves that may 
apply a common external tariff to non-member countries. Examples: 
Arab League (AL) and European Free Trade Association (EFTA).
3
Free Trade Areas
Member countries eliminate all tariff and quota barriers on trade 
among themselves. Example: ASEAN3India Free Trade Area (AIFTA), 
which came into force on August 1, 2005.
Customs Unions
Countries eliminate tariffs on trade among themselves while 
maintaining a common external tariff for non-member countries. 
Examples: European Union (EU), Gulf Cooperation Council (GCC), 
and Southern Common Market (MERCOSUR).
Common Market
Allows free movement of goods and factors of production such as 
labor, capital, and other resources. Examples: European Union (EU) 
and Association of Southeast Asian Nations (ASEAN).
Economic and Monetary Union
Member countries share a common currency, necessitating strong 
convergence of macroeconomic policies. Example: European Union 
with the euro.
The General Agreement on Tariffs and Trade 
(GATT)
GATT focuses on international trade in goods, overseen by the Council for Trade in 
Goods with representatives from all WTO member countries.
Why GATT Became Less Relevant
Could not keep up with rapidly evolving world trade landscape
Did not address growth in international investments
Did not cover intellectual property rights or trade in services
Inadequate for growing world merchandise trade volume
Institutional Challenges
Ambiguities in the multilateral system could be exploited
Unsuccessful agricultural trade liberalization
Shortcomings in institutional structure and dispute settlement
Not a treaty - terms binding only if not conflicting with domestic rules