Trade Agreement Challenge

The balance of geopolitical powers and the public`s rejection of uncontrolled politicisation have replaced this dream with an explosion of bilateral and multilateral trade agreements around the world (see Figure 1 for an overview of preferential agreements available to the EU). How does a company, with this multitude of agreements, implement the necessary changes to take advantage of these free trade agreements? Preparation, process changes, risk assessment and supplier/product qualifications? And they must do so at the same time as the ever-changing procurement, manufacturing and sales strategies dictated by a truly global environment, with both developed and emerging countries key to business success. It`s like jumping while it`s moving at 100 km/h. The answer is obvious: with dedicated resources, software processes and automation, the integration of preferential origin across the value chain, gaining strategic competitive advantages – and margin base points – every step of the way. However, while wto rules such as competition, the environment, labour, small and medium-sized enterprises (SMEs) and gender are not yet available, the potential for different rules for different trade relationships is rather a danger. However, even on these issues, for practical reasons, the parties to the ATR are more likely to be implemented by the parties to the ATR on a non-discriminatory basis. Other provisions, such as membership clauses, allow third parties to join the existing ATR. The CPTPP is, for example, an extension of an existing RTA (Trans-Pacific Strategic Economic Partnership) between Brunei, Chile, New Zealand and Singapore. Similarly, ATRs, which allow a certain percentage of a product to contain inputs from third parties, while being eligible for preferential treatment, allow producers to maintain their existing production lines. With regard to the second issue mentioned above, it poses a particular challenge for developing countries, many of which are outside the RTA networks and production and value chains. Efforts to implement the African Continental Free Trade Agreement (AfCFTA), which brings together 49 African countries and aim to liberalize trade barriers in the goods and services sector, are an important exception. Although it has only been ratified by 13 countries to date, it has the potential to significantly reduce trade barriers, particularly those relating to intra-African trade. “As a result, these agreements are increasingly defining new rules that govern trade between their parties and are not extended to all other WTO members.

In addition, some of these issues are not regulated by the WTO in international trade. The inclusion of these provisions indicates that there is a growing divergence between existing WTO and ATR rules. This is another challenge for the multilateral trading system, firstly because it makes WTO rules less relevant to some trading partners and, second, because WTO members who are not part of the RTA network are increasingly excluded from these rules. With regard to the first challenge, recent investigations by the WTO secretariat indicate that the divergence of some provisions may be less pronounced, given that ATRs generally tend to repeat WTO rules.

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