RTAs – A FACT SHEET

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• The proliferation of Regional Trading Arrangements (RTAs) in recent years has led to widespread debate on the issue of regionalism vs. multilateralism. Looking from the angle of the multilateral trading system, the debate stems from the increased popularity of RTAs in a world trading arena now ruled by an improved and disciplined multilateral trading system. RTAs have been concluded among high-income countries, low-income countries and more recently starting with NAFTA (North American Free Trade Area) between high-income and developing countries. The structure of regional agreements varies hugely, but all have one thing in common – the objective of reducing barriers to trade between member countries. At their simplest they merely remove tariffs on intra-bloc trade in goods, but many go beyond that to cover non-tariff barriers and to extend liberalisation to trade and investment. On the whole, the newer agreements tend to have deeper coverage, extending into areas of domestic disciplines beyond the exchange of tariff concessions, and a number of agreements now also cover the services sector.

• There has been exponential growth of RTAs during the last decade. As on October 2002, 255 RTAs have been notified to the GATT/WTO and this number is estimated to reach up to 300 by the end of 2005. Almost 60% of global trade is now estimated to be channelled through RTAs.