Regional Trade Agreements and the WTO: General Observations and NAFTA Lessons for Asia

24 Pages Posted: 5 Dec 2005

See all articles by William J. Davey

William J. Davey

University of Illinois College of Law

Date Written: November 30, 2005

Abstract

This paper first outlines briefly the history and treatment of regional trade agreements (RTAs) in the WTO/GATT. In that regard, it examines the evolution of RTAs in the GATT/WTO system and the difficulties that the system has had in trying to apply the rules applicable to free trade areas (FTAs) and customs unions so as to control the spread of questionable RTAs. It considers the recent developments in WTO dispute settlement in this regard and the current negotiations in the Doha Round. The paper then considers briefly how economists evaluate the effects of RTAs. The paper concludes by considering how the NAFTA experience may be relevant for Asia. The paper concludes that (i) the economic benefits of negotiating RTAs are likely to be limited; (ii) that complex rules of origin should be avoided; (iii) that while limited agreements with a limited number of partners are easier to negotiate, the problems of complex networks of RTAs and their interrelationships are such that a single broad-based agreement with broad coverage would be preferable; and (iv) that attention should be paid to creating a robust dispute settlement system as without one, the limited benefits of an RTA are even less likely to materialize.

Suggested Citation

Davey, William J., Regional Trade Agreements and the WTO: General Observations and NAFTA Lessons for Asia (November 30, 2005). Illinois Public Law Research Paper No. 05-18, Available at SSRN: https://ssrn.com/abstract=863846 or http://dx.doi.org/10.2139/ssrn.863846

William J. Davey (Contact Author)

University of Illinois College of Law ( email )

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