Members of the World Trade Organization (WTO) examined the Integral and Progressive Treaty of the Trans-Pacific Partnership (CPTPP) with the intention of following the evolution of the link between the multilateral trading system and regional trade agreements.
“There has always been a close relationship between regional trade agreements and the multilateral trading system. […] The work of the Committee is particularly valuable as trade relations become increasingly complex under new agreements.”, said the Director General Okonjo-Iweala at the 100th meeting of the Committee on Regional Trade Agreements, held on 21 June 2021.
It should be noted that the multilateral trade system and regional trade agreements have a long history of coexistence.. In fact, the GATT was the result of the consolidation of bilateral preferences existing at the time. Throughout the history of the GATT and the creation of the WTO, there are examples of regional trade agreements and the multilateral system sharing ideas and borrowing from other international treaties. While this coexistence is undeniable, so is the growth of regional trade agreements, especially since the early 90s. From an annual average of three agreements during the GATT era, the number increased to twenty-five during the WTO years. Moreover, regional trade agreements exist today among WTO members, whether developed, developing or less developed.
According to the information, All 164 WTO members participate in at least one regional trade agreement and estimates suggest that around 20% of world merchandise trade occurs between regional trade agreement partners. on the basis of preferential tariff rates. In addition, More than 75% of global trade takes place on most-favored-nation (MFN) terms, which underlines the trade importance of multilateral agreements in the WTO.
In this regard, the Director General said: “Today's regional trade agreements go beyond market access for goods and services and related WTO rulesIn this regard, the Committee considered that one of the largest and most complex of these is the CPTPP, which came into force in December 2018.
The signatories of the CPTPP are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Of these, seven have ratified the agreement, with the pact in force for them. Brunei Darussalam, Chile, Malaysia and Peru have not yet completed the ratification process.
In addition, Singapore liberalized all its tariffs upon entry into force of the agreement, while New Zealand will do so by 2024. Other parties will liberalize at least 95,9% of their tariff lines by 2039 at the latest. In addition, the CPTPP's commitments on trade in services are generally broader than those of the WTO's General Agreement on Trade in Services. The Pacific Rim Pact also includes commitments on investment, public procurement, intellectual property, competition, state-owned enterprises, the environment, labor, e-commerce, and small and medium-sized enterprises..
New Zealand and Japan have reportedly announced that the parties have decided on 2 June 2021 to initiate the process for the UK to join.
This meeting has allowed WTO Members to closely monitor the development of regional trade agreements in order to better understand them and, more importantly, their interaction with the multilateral trading system.WTO Press Release)
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