Regional Agreements and the World Trade Organization Negotiations

Abstract

during the last decades has been the expansion of regional trading agreements (RTAs), particularly in the Western Hemisphere and Europe. In the Americas, total trade grew at an average of 10.2% per year between 1990 and 2000, more than double the rate of extrahemispheric trade (4.4%), and the intra-trade share jumped from 48% to 61% of the total (Inter-American Development Bank). This has been related to several reasons, such as the spread of democracy in Latin America, which opened new opportunities for dialogue and collaboration, and the important changes in trade, macroeconomic, public sector, and regulatory policies that further promoted the integration of those countries in the world economy. In particular, there were important reductions of trade barriers, which took place multilaterally (as a result of GATT/WTO negotiations), regionally (as a consequence of different trade agreements in the American continent, such as NAFTA and MERCOSUR), and unilaterally. Currently there are ongoing discussions, initiated in 1994, to create a Free Trade Area of the Americas (FTAA) by 2005, as well as a host of other initiatives, including possible links between MERCOSUR and the European Union (EU), and the accession of Chile to NAFTA. On the other side of the Atlantic, the EU, itself the result of a wide-ranging process of economic and political integration, is pursuing the enlargement of the Union while, at the same time, negotiating and participating in several other trade agreements. Ten countries (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia) are likely to join the EU in 2004, whereas two other countries (Bulgaria and Romania) may join later in the decade. Trade agreements with these countries have been part of the Europe Agreements since 1992. In addition, the EU negotiated an FTA with South Africa in October 1999, signed the Cotonou Agreement (successor to previous Lom6 Conventions) with 77 African, Caribbean, and Pacific (ACP) countries on June, 2000, and approved the Everything but Arms (EBA) Initiative on February 26, 2001. There are also other regi nal and bilateral trade agreements or initiatives with Turkey, Mexico, Mediterranean cou tries, Balkan countries, MERCOSUR, and others.