Preferential trading area

"Preferential trade agreement" redirects here. For the usage of the term by the World Trade Organization, see Trade pact § By the World Trade Organization.

World trade
Part of a series on

Policy Import Export Balance of trade Trade law Trade pact Trade bloc Trade creation Trade diversion Export orientation Import substitution Trade finance Trade facilitation Trade route Domestic trade Tax, tariff and trade
Restrictions Trade barriers Tariffs Non-tariff barriers Import quotas Tariff-rate quotas Quota share Import licenses Customs duties Export subsidies Technical barriers Bribery Exchange rate controls Embargo Safeguards Countervailing duties Anti-dumping duties Voluntary export restraints
History Mercantilism Protectionism Laissez-faire Free trade Economic nationalism Economic integration
Organizations International Monetary Fund International Trade Centre World Trade Organization World Customs Organization
Economic integration Preferential trading area Free trade area Customs union Single market Economic union Monetary union Fiscal union Customs and monetary union Economic and monetary union
Issues Intellectual property rights Smuggling Competition policy Government procurement Outsourcing Globalization Fair trade Trade justice Emissions trading Trade sanctions War Currency Trade costs Customs Trade Trade and development
Lists Imports Exports Tariffs Largest consumer markets Leading trade partners
By country Trade mission Trading nation United States Argentina Pakistan Romania Vietnam India
Theory Comparative advantage Competitive advantage Heckscher–Ohlin model New trade theory Economic geography Intra-industry trade Gravity model of trade Ricardian trade theories Balassa–Samuelson effect Linder hypothesis Leontief paradox Lerner symmetry theorem Terms of trade

A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. A PTA can be established through a trade pact. It is the first stage of economic integration. The line between a PTA and a free trade area (FTA) may be blurred, as almost any PTA has a main goal of becoming a FTA in accordance with the General Agreement on Tariffs and Trade.

These tariff preferences have created numerous departures from the normal trade relations principle, namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members.^[1]

List of preferential trade areas

Stages of economic integration around the World (each country colored according to the most integrated form that it participates with):

Economic and Monetary Union (CSME/EC$, EU/€, Switzerland–Liechtenstein/CHF)

Economic union (CSME, EU, EAEU, MERCOSUR, GCC, SICA)

Customs and Monetary Union (CEMAC/XAF, UEMOA/XOF)

Common market (EEA–Switzerland, ASEAN)

Customs union (CAN, EAC, EUCU, SACU)

Multilateral Free Trade Area (CEFTA, CISFTA, COMESA, EFTA, GAFTA, NAFTA, SAFTA, AANZFTA, PAFTA, SADCFTA)

A free trade area is basically a preferential trade area with increased depth and scope of tariffs reduction. All free trade areas, customs unions, common markets, economic unions, customs and monetary unions and economic and monetary unions are considered advanced forms of a PTA, but these are not listed below.

Multilateral

Economic Cooperation Organization (ECO) (1992)
Generalized System of Preferences
Global System of Trade Preferences among Developing Countries (GSTP) (1989)
Latin American Integration Association (LAIA/ALADI) (1981)^[2]
Melanesian Spearhead Group (MSG) (1994)
Protocol on Trade Negotiations (PTN) (1973)
South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) (1981)^[3]

Bilateral

European Union – ACP countries, formerly via the trade aspects of the Cotonou Agreement, later via Everything But Arms (EBA) agreements
India – Afghanistan (2003)
India – Mauritius
India – Nepal (2009)
India – Chile (2007)
India – MERCOSUR (2009)
ASEAN – PR China (2005)
Laos – Thailand (1991)

References

↑ CRS Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition - Order Code 97-905
↑ From 18 March 1981 LI5342
↑ From 1 January 1981 WT/COMTD/N/29

External links

Forms of economic integration

Trade bloc	Preferential trading area Free-trade area Economic partnership Passport free zone Single market

Economic union	Customs union Monetary union Customs and monetary union Economic and monetary union Complete economic integration

Shared policies	Fiscal union Social union Political union

Theory	Economic integration effects Friction of distance Harmonisation of law Theory of the second best

Regions	Europe Latin America Middle East

This article is issued from Wikipedia - version of the 2/21/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.