Trade Agreements Guide
What is a regional trade agreement?
A regional trade agreement (RTA) is a treaty or contractual agreement that two or more governments sign to grant each other preferential market access and set rules to govern their trade relations. Through trade agreements, governments agree on a range of obligations. These can include improved market opportunities for services and may also include processes and regulations for trade in services and investment, among other commitments.
The General Agreement on Trade in Services (GATS)
The creation of the GATS was one of the landmark achievements of the World Trade Organization WTO. It includes the following key concepts:
- MFN (Most Favored Nation) treatment: Under Article II of the GATS, WTO (World Trade Organization) Members are held to extend immediately and unconditionally to services or services suppliers of all other members “treatment no less favourable than that accorded to like services and services suppliers of any other country”
- Transparency: WTO Members are required to publish all measures and respond to other member countries requests for information, through national enquiry points.
- Market access: Commitment from members to negotiate on access to markets. There may be some limitations and Article XVI(2) has details.
- National treatment: WTO Members are not allowed to discriminate in favor of their indigenous services or suppliers.
The GATS agreement was structured to encourage and increase the participation of developing countries in services trade. The GATS does allow a waiver to allow preferential treatment for exporters of services from least-developed countries (LDCs).
How can trade agreements affect my business?
- Trade in services: Businesses can benefit from preferential market access terms for supplying their services in the markets where a RTA is in force.
- Intellectual property protection and enforcement: Trade agreements increasingly include detailed chapters on intellectual property protection and enforcement. For more information, see theTrade4MSME guide on Intellectual Property.
- Investment: A RTA can provide favorable circumstances enabling companies to set up a commercial business presence in a foreign market. Investment rules in RTAs (Regional Trade Agreements) or international investment agreements (IIAs) can in some cases protect foreign investments in host countries. More information on international investment policy can be found at the United Nations Conference on Trade and Development (UNCTAD) various tools can help assess the benefits of RTAs and IIAs.
What are the different types of RTAs?
RTAs are signed on a bilateral (an agreement between two governments) or regional basis (agreements with more than two governments). Governments signing these agreements benefit in terms of preferential market access. They also often contain rules that aim to facilitate trade in services.
How do I know if my service benefits from preferential treatment under an RTA?
The World Trade Organization (WTO) website has more information on regional trade agreements. Trade agencies, industry associations, and chambers of commerce may also have information on how you can benefit from regional trade agreements.
Links to Supporting Information
WTO WTO | Services – The GATS: objectives, coverage and disciplines Trade in services.
WTO directdoc Directory of country contact points for trade in services.
Trade4MSME guide Intellectual Property Considerations
UNCTAD Home | UNCTAD Investment Policy Hub Investment information
UNCTAD International Investment Agreements Navigator | UNCTAD Investment Policy Hub information on IIAs
WTO WTO | Regional Trade Agreements – scope of RTAs Information on regional trade agreements RTAs
WTO WTO | Regional trade agreements Regional Trade Agreement Database
WTO (16) WTO Database on RTAs Tutorial series – Main functionalities – – YouTube Tutorial on how to use the RTA database
I-TIP (Integrated Trade Intelligence Portal) Services World Trade Organization and the World Bank. WTO | I-TIP Services A set of linked databases that provides information on provisions for trade in services within regional trade agreements (RTA).