Regional trade agreement
Also called: RTA · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT
Meaning
A regional trade agreement (RTA) is any reciprocal trade deal between two or more countries. Reciprocal means each side gives the other concessions. RTAs include free trade agreements and customs unions. They are notified to the WTO under GATT Art. XXIV or under the Enabling Clause (the legal basis for preferences involving developing countries). RTAs are a legal exception to the most-favoured-nation rule, under which a benefit given to one WTO member must go to all.
Example
The India–UAE CEPA (May 2022) is an RTA. The two countries cut tariffs only for each other and do not have to extend those cuts to other WTO members.
Don't confuse with
- Generalised System of Preferences (GSP): here developed countries give developing countries low or zero tariffs one way, without asking for anything back. An RTA is reciprocal.
Related concepts
- Stages of economic integration
- Preferential trade agreement
- Free trade agreement
- Customs union
- Common market
- Economic union
- Monetary union
- Trading bloc
- Regional economic groupings
- Regionalism