One of the positive impacts of economic globalization is the shift of most, although not all, international trade relations into a rule-based, secure and institutionalized system instead of an arbitrary one. WTO and modern-time RTAs are the results of a long-term process since the 1940s which can be taken as a major step for the systematic regulation of international trade as a continuation of the structure from GATT 1947.
Eight rounds of negotiations took place during the GATT 1947 regime during which the economic interests of most developing and least developed countries were underrepresented or totally ignored as the major parties to the negotiations were developed nations. Hence, developing and LDCs are left with the only choice of complying with the already established rules if they wish to be integrated into the multilateral system.
Parallel Rules: Overlap of Jurisdiction of Regional Trade Agreements (RTAs) with World Trade Organisation (WTO)Posted: 16 November, 2021
It is very interesting how RTAs have increased in number and scope in recent years as manifestation of the new tendency towards regionalism at the expense of WTO’s multilateral arrangement. As of 15 October 2021, the WTO received 568 notifications of RTAs from its members and currently 350 RTAs are in force. RTAs and their reciprocal preferential trade rules are in principle against WTO’s non-discrimination principles but they constitute one of the authorised exemptions under WTO.
The fact that the Doha Development Round as a major multilateral trade negotiation under WTO has deadlocked for more than a decade gave RTAs the opportunity to be taken as important alternatives. RTAs have proliferated not only in number but in the regions they cover and in the sectors of trade they apply to as well. The rapid growth in the number of RTAs in recent years created two phenomena: (i) it undermines WTO’s non-discrimination principle as RTAs establish preferential rules among member states and hence generate the ‘spaghetti bowl’; and (ii) RTAs often institutionalise their dispute settlement mechanisms to address disputes arising with regard to the applications of these agreements. The possibility of potential conflicts of jurisdiction between the respective dispute settlement mechanisms might arise as RTAs include separate dispute settlement rules to deal with obligations of parties under these RTAs that are parallel or even similar to their obligations under the WTO covered agreements.