Regionalism and the Multilateral Trading System

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Regional trade agreements (RTAs) are increasingly portrayed as a threat to the free global exchange of goods andservices. They involve an ever-growing share of world trade. The proportion of world trade covered by such accordsis expected to grow from 43% today to 55% in 2005, if all regional agreements now in discussion are actually putinto place. Moreover, in the event of a logjam in the ongoing Doha round of multilateral trade talks under the WTO,many WTO members are ready to place even greater emphasis on regional initiatives.

Against this backdrop, this study compares rule-making provisions in regional trade agreements with those of theWTO in individual chapters covering ten specific areas: services, labour mobility, investment, competition policy,trade facilitation, government procurement, intellectual property rights, contingency protection, environment, andrules of origin. Three main questions are addressed: How far do RTAs go beyond existing multilateral trade rules inthe WTO? Do they present a divergence from or a convergence with the multilateral system? What are the effectson non-members?

It emerges clearly from the ten papers that precisely because they are both a sub-set of liberalisation and anexception to the most-favoured-nation (MFN) principle, RTAs have both positive and negative impacts. How thesepositive and negative elements play out is, accordingly, a central theme of this study. The principal purpose of thisbook is to clarify the relationship between regionalism and the multilateral trading system. It also aims to provide ananalytical framework for WTO members' ongoing consideration of how best to manage that relationship and how tofoster the complementarities between RTAs and the multilateral system.

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Regionalism and the Multilateral

Trading SystemORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

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Publi en franais sous le titre :

Le rgionalisme et le systme commercial multilatral

OECD 2003

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3

FOREWORD

This study on the relationship between regional trade agreements (RTAs) and the multilateral trading system was mandated by the Trade Committee at its meeting of 13-14 February 2001. A principal frame of reference is provided by the OECD 2001 Ministerial Communiqu which observed that "WTO-consistent preferential trade agreements can complement but cannot substitute for coherent multilateral rules and progressive multilateral liberalisation". In exploring the nature of that complementarity, the study compares rule-making provisions in RTAs with those in the WTO in ten issue areas: services, labour mobility, investment, competition, trade facilitation, government procurement, intellectual property rights, contingency protection, environment and rules of origin.

It was felt to be particularly appropriate to focus, as this study does, on the rule-making dimension of regional trade agreements. This for two reasons. First, in recognition of the fact that the ten issues covered in this study, and the rule-making dimension inherent in them, are receiving increased attention in regional trade initiatives. Second, as a complement to the more established though by no means complete work on the assessment of the welfare effects of preferential regional trade agreements.

The ten chapters of this study have benefited from extensive discussion within the Working Party of the OECD Trade Committee. The chapters on Competition Policy and on Environment were also discussed, respectively, in the Joint Group on Trade and Competition and the Joint Working Party on Trade and Environment.

In preparing each of the issue papers of this study a very wide range of agreements has been examined. The decision as to whether or not to mention any particular agreement has rested on the extent to which that agreement offers useful insights about the nature of the relationship between regional trade initiatives and the multilateral trading system. The focus therefore is not so much on RTAs themselves as on the issues central to, or bearing on, the multilateral trading system, drawing on experience in different RTAs to the extent that it is relevant for the analysis. While this approach has widened the range of experience on which to draw, it has also called for care in acknowledging the different circumstances in which that experience has been, or is being, forged.

This study is intended to provide an analytical backdrop for WTO Members' ongoing consideration of how best to manage the relationship and foster greater complementarity between RTAs and the multilateral trading system.

This book is published under the responsibility of the Secretary-General.

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TABLE OF CONTENTS

Glossary and abbreviations ...................................................................................................... 7

Key Findings. Regionalism: a complement, not a substitute .............................................. 11

Chapter 1. Services........................................................................................................ 23

Chapter 2. Labour Mobility.......................................................................................... 45

Chapter 3. Investment .................................................................................................. 61

Chapter 4. Competition Policy ..................................................................................... 71

Chapter 5. Trade Facilitation........................................................................................ 87

Chapter 6. Government Procurement........................................................................... 97

Chapter 7. Intellectual Property Rights ...................................................................... 111

Chapter 8. Contingency Protection ............................................................................ 127

Chapter 9. Environment ............................................................................................. 139

Chapter 10. Rules of Origin ......................................................................................... 159

Tables

Table 1.1 Key disciplines in RTAs covering services ........................................................ 29 Table 1.2 Key features of RTAs covering services ............................................................ 34 Table 7.1 IPRs: