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REGIONAL TRADE AGREEMENTS (PTA (preferential trade agreement) (VIOLATES…
REGIONAL TRADE AGREEMENTS
PTA (preferential trade agreement)
VIOLATES non discrimination of GATT
ALLOWS exemptions only if all tariffs removed
NOT ALLOWED if agreement raises tariff for non-PTA members
LIMITING potential multilateral efforts to liberalize trade
4 PREFERENTIAL AGREEMENT
FREE TRADE AGREEMENT - maintain its own trade policy with non members
CUSTOMS UNION - adopt common external tariffs and coordinate trade policies
COMMON MARKET - free movement of labour and capital
ECONOMIC UNION - harmonization of gov spending and taxation
PTA CRITICS
VIOLATE non discrimination
TRADE DIVERSION - divert from more efficient to less efficient exporter due to trade agreement
DOMINATES trade creation (growth in trade)
NO trade diversion with less developed countries joining agreement
PTA SUPPORTERS
ENABLES trade liberalization to greater degree than multilateral negotiations
TRADE creation > TRADE diversion because difficult to negotiation with all WTO members
HARMONIZING regulations and recognizing standards and practices of other countries --> IMPROVE MARKET ACCESS
EXTEND PTA benefits to others
FREE TRADE AGREEMENTS
SEPARATE tariffs with 3rd countries
DIFFICULT to harmonize external tariffs without having larger member dictating policy
RULES OF ORIGIN - prevent tariff circumventing with 3rd country exports entering at lowest tariff rates and being trans- shipped to high tariff markets
DIFFERENT RULES OF ORIGINS --> trade barriers and confuse traders
NAFTA
CANADA - permanent restriction on diary, eggs, poultry imports
U.S - maintained TRQ for sugar, peanuts, dairy from Canada
USMCA
AUTOMOBILES and SUNSET CLAUSE
RULES OF ORIGIN
INCREASED US market access to Canadian Dairy market
US grown wheat treated the same as Canadian grown
TRANS- PACIFIC PARTNERSHIP
PREVENT trade diversion to US
INCREASED access to Japan and VIET - especially pork, beef, pulses, F&V ...
REDUCED tariffs from Japan and VIET for Canola oil