The Hindu Business Line : RTAs can build upon WTO rules, says UK Trade Minister

FREE trade agreements (FTAs) can build upon WTO rules and can enable partners to go further and faster than is sometimes possible at the multilateral level.

But the core issue for the future will be how to recognise the existence of regional trading arrangements (RTAs) and impose discipline so that they are complementary to the WTO system.

Speaking at the CII Partnership Summit 2006 on `FTAs, RTAs: Limiting WTO goals', Mr Ian Pearson, Minister for Trade, The Foreign and Commonwealth Office, UK, said: "As traditional trade barriers are reduced, FTAs can provide the framework to tackle non-tariff barriers in areas such standards and investment, and in encouraging conformity assessment and regulatory co-operation."

According to the Union Commerce Minister, Mr Kamal Nath, India has always stood for an open, equitable, predictable, non-discriminatory and rule-based international trading system.

"It is our view that RTAs are building blocks towards the overall objective of trade liberalisation and can actually support and facilitate WTO's multilateral trading system."

He, however, added that it was clearly recognised now that RTAs are here to stay and have become a reality in the international trading system.

While maintaining that the multilateral rules-based system under the WTO was the most effective and legitimate means of managing and expanding trade relations, the UK Trade Minister said: "I believe that comprehensive and well-designed agreements can actually complement the wider, multilateral process."

In his opinion, regional agreements are a reality and not in direct conflict with the multilateral system.

FTAs, he said, are widely used by many WTO members to pursue their economic, political, and developmental objectives, "and indeed form a significant part of EU trade policy within the framework of our WTO participation."

According to him, the EU, perhaps more than any other major trading bloc, has favoured trade agreements on a region-to-region basis.

"And of course, intra-regional trade within the EU has grown rapidly and not just as a result of the EU's expansion but because of the tariff and quota-free access between countries and the growth of the single market."

Evidence, the Minister said, suggests that the most successful RTAs are those that have a large and diverse membership, low external most favoured nation tariffs, and a comprehensive coverage of sectors and products, with few exceptions.

He added that the EU was committed a challenging programme of trade negotiations with a number of regional groups outside Europe such as Mercosur and the Gulf Co-operation Council, as well as Economic Partnership Agreements with 79 countries of the African, Caribbean, and Pacific regions.