Preferential Trade Area

A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. It is the first stage of economic integration.

These tariff preferences have created numerous departures from the normal trade relations principle, namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members.

With the recent multiplication of bilateral PTAs and the emergence of Mega-PTAs (wide regional trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or Trans Pacific Partnership (TPP)), a global trade system exclusively managed within the framework of the WTO now seems unrealistic and the interactions between trade systems have to be taken into account. The increased complexity of the international trade system generated by the multiplication of PTAs should be taken into account in the study of the choice of fora used by countries or regions to promote their trade relations and environmental agenda. PTAs have seen rapid growth; in the 1990s, there were slightly more than 100 PTAs. By 2014, there were more than 700.

List of preferential trade areas

A free trade area is basically a preferential trade area with increased depth and scope of tariffs reduction. All free trade areas, customs unions, common markets, economic unions, customs and monetary unions and economic and monetary unions are considered advanced forms of a PTA, but these are not listed below.

Multilateral

Economic Cooperation Organization (ECO) (1992)

Generalized System of Preferences

Global System of Trade Preferences among Developing Countries (GSTP) (1989)

Latin American Integration Association (LAIA/ALADI) (1981)

Melanesian Spearhead Group (MSG) (1994)

Protocol on Trade Negotiations (PTN) (1973)

South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) (1981)

Bilateral

Several hundred bilateral PTAs have been signed since the early 20th century. The TREND project[6] of the Canada Research Chair in International Political Economy lists around 700 trade agreements, the vast majority of which are bilateral.

European Union: ACP countries, formerly via the trade aspects of the Cotonou Agreement, later via Everything but Arms (EBA) agreements

India – Afghanistan (2003)

India – Mauritius

India – Nepal (2009)

India – Chile (2007)

India – MERCOSUR (2009)

ASEAN – PR China (2005)

Laos – Thailand (1991)