WTO members review four regional trade agreements between developing countries

05/10/2020    76

WTO members reviewed on 29 September four regional trade agreements concluded between developing countries at a dedicated session of the Committee on Trade and Development.

The peer review of regional trade agreements among developing countries is carried out as part of the WTO's Transparency Mechanism for Regional Trade Agreements. Although deviating from the WTO principle of non-discrimination, these agreements are allowed under the WTO 1979 Enabling Clause to help developing countries meet their development objectives and further integrate into the global economy. The consideration is based on a factual presentation prepared by the WTO Secretariat and questions and replies between WTO members.

The Chair of the Committee, Ambassador Mohammad Qurban Haqjo of Afghanistan, urged the parties of the regional trade agreements notified under the Enabling Clause to submit to the Secretariat the necessary data and information to allow the preparation of the remaining factual presentations.

The full list of notified regional trade agreements between WTO members can be found here.

Preferential Trade Agreement between MERCOSUR and SACU

The agreement between the Southern Common Market (MERCOSUR) comprising Argentina, Brazil, Paraguay and Uruguay, and the Southern African Customs Union (SACU) comprising Botswana, Lesotho, Eswatini, Namibia and South Africa, entered into force in April 2016. Since then, Argentina, Brazil, Paraguay and Uruguay liberalized respectively 16.2 per cent, 15.8 per cent, 24.6 per cent and 23.5 per cent of their tariffs on imports from the SACU members. Duties on over 63 per cent of SACU members' tariff lines on goods from MERCOSUR were either eliminated or reduced. The agreement, which aims to promote bilateral trade flows, also contains provisions on rules of origin, safeguard measures, dispute settlement procedures and customs cooperation.

The parties noted that in 2017, MERCOSUR countries were SACU's ninth largest source of imports and 27th destination for exports. SACU members were MERCOSUR's 33rd largest source of imports and destination for exports in 2017.

Free Trade Agreement between ASEAN and the Republic of Korea

The agreement between the Association of Southeast Asian Nations (ASEAN) and Korea entered into force in 2007. It provides for Korea to eliminate over 76 per cent of its tariffs on imports from ASEAN countries and for ASEAN members to eliminate between 85 per cent and 100 per cent of their tariffs on imports from Korea. The agreement also includes provisions on rules of origin, safeguards and transparency. The agreement on trade in services was considered in the Committee on Regional Trade Agreements in 2018.

The parties explained that trade between ASEAN and Korea has increased by over 178 per cent, from over USD 56 billion in 2006 to over USD 156 billion in 2019. Speaking on behalf of ASEAN, Thailand noted that Korea is ASEAN's fifth largest trading partner and tenth largest source of foreign direct investment.

Preferential Trade Agreement between India and Afghanistan

The agreement entered into force in May 2003. Its objective is to expand trade and economic relations between the two parties by removing barriers to trade in goods and ensuring fair conditions of competition. The agreement also contains provisions on rules of origin, safeguards, including for balance of payments reasons, and dispute settlement.

The parties noted that Afghanistan eliminated tariffs on eight lines covering tea, sugar, certain medicinal products and cement and India eliminated tariffs on 42 lines and reduced tariffs on a further 31 lines by 50 per cent.

The accession of Egypt to COMESA 

Egypt joined the Common Market for Eastern and Southern Africa (COMESA) in February 1999. Although not yet operational, the customs union was launched in June 2009. As a result, tariffs on trade between Egypt and other COMESA member states were eliminated for some parties and reduced for others. The agreement also includes provisions on rules of origin, customs-related procedures and cooperation on different issues, among other topics.

Egypt said that joining COMESA was part of its ambition to further its economic integration at regional and continental levels and that the trade bloc was at the forefront of such developments in Africa

Source: WTO