Preferential Trade Agreement Insightsonindia

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A binding agreement on rules and discipline is an important dimension of the political pact necessary for better integration of legislation. Effective implementation of EPZs requires transparent and inclusive consultation processes, administrative modernization and coordination mechanisms such as referral dispute resolution systems and standard-setting bodies. Other examples are the provisions on capacity building and resource transfers, which are often found in EPZs, where there is a strong asymmetry between partners, i.e. the North-South agreements. Finally, the possibility of greater trust between the parties is another important additional benefit of the PTA (in addition to the legal certainty provided by the agreement itself). Institutions that manage trade agreements, such as regional economic communities, therefore have a key responsibility to take advantage of the benefits of this new generation of high-quality trade agreements. A first lesson is that developing countries should not be afraid of PTAs, but should view them differently as old-style trade agreements. The flat PTA economic paradigm does not necessarily apply to deep, high-quality EDPs. Concepts such as reciprocal merclist liberalization, trade creation and distraction or a textual approach to signing UPPs can still support the arguments of many policy makers, but are often obsolete or incomplete for deep liberalisation of integration. If this is not understood, this may explain why most ATPs do not make full use of the liberalization opportunities behind border measures or give priority to the interests of the parties. What is important is that in the architecture of most PTAs, not all obligations are legally binding.

Soft law rules are rich in preferential regimes that reflect the incomplete contractual nature of international business transactions. There are several reasons for this, some of which are directly related to the development of EPZs. Removing regulatory barriers to trade and investment is above all synonymous with positive integration, in which new rules and institutions must be developed, often together, to remove such barriers.

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