With the WTO in deadlock, attention has turned to bilateral free trade agreements (FTAs). Having many members makes consensus difficult to forge, and recent years have seen the formation of a complex array of “ coalitions” with competing, and often-incompatible, agendas.ĭisagreement among these coalitions - particularly over the sensitive issue of agriculture - is one of the main reasons the Doha round is currently deadlocked after 12 years of talks. Since Russia’s accession to the WTO in 2012, practically all significant economies have become members, creating a single integrated system of global trade rules.īut size has also proven to be one of the WTO’s major weaknesses. Multilateralism is the “policy purist” approach to trade liberalisation. The product scope of the WTO has gradually expanded since 1948 through a series of negotiating rounds the current one is known as the Doha “ development round”, which commenced in 2001. The WTO currently has 159 members, who exchange tariff preferences in line with the non-discriminatory “ most-favoured-nation” principle. Historically, multilateralism has been the dominant approach, embodied in the World Trade Organisation. Each strategy carries a mix of benefits and costs. There are multiple ways for governments to advance free trade trade liberalisation can be negotiated via multilateral, bilateral or regional mechanisms. So, where should Australia’s priorities lie? Given limited bureaucratic and diplomatic resources, it would be both difficult and inadvisable to spread efforts evenly across the range of proposals. This is a very crowded trade policy agenda, characterised by complex, overlapping - and sometimes competitive - initiatives. It has also open bilateral trade negotiations with five of its most important economic partners – China, Japan, Korea, Indonesia, and India. It’s a participant in the ongoing Doha round of World Trade Organisation (WTO) talks, and a party to the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) negotiations in Asia. Calling the trade minister Australia’s “ ambassador for jobs”, the Coalition has staked its economic and foreign policy credibility on the promise to finalise a series of free trade deals that made limited progress under former Labor governments.īut Australia already has a lot of trade on its plate. In other words, regional integration should complement the multilateral trading system and not threaten it.One of the first acts of Tony Abbott’s government was to declare it intended to “ embrace free trade” in its first term in office. In particular, the agreements should help trade flow more freely among the countries in the RTA without barriers being raised on trade with the outside world. But Article 24 of the General Agreement on Tariffs and Trade (GATT), Article 5 of the General Agreement on Trade in Services (GATS) and the Enabling Clause (Paragraph 2(c)) allow WTO members to conclude RTAs, as a special exception, provided certain strict criteria are met. Normally, setting up a customs union or free trade area would violate the WTO’s principle of non-discrimination for all WTO members (“ most-favoured-nation”). They also recognize that under some circumstances these agreements could hurt the trade interests of other countries. The WTO agreements recognize that RTAs can benefit countries, provided their aim is to facilitate trade among its parties. Services, intellectual property, environmental standards, investment and competition policies are all issues that were raised in regional negotiations and later developed into agreements or topics of discussion in the WTO. In turn, some of these rules have paved the way for agreement in the WTO. RTAs, defined in the WTO as reciprocal preferential trade agreements between two or more partners, have allowed countries to negotiate rules and commitments that go beyond what was possible multilaterally. Regional trade agreements (RTAs) seem to compete with the WTO, but often they can actually support the WTO’s multilateral trading system. WTO members, working in various committees, work to address such concerns.īack to top Regional trading arrangements One of the most frequently asked questions is whether these regional groups help or hinder the WTO’s multilateral trading system. These agreements have increased in number as well as complexity since the early 1990s.
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