Free Trade Agreement Wto Rules

But these major economies are not just relying on fundamental WTO rules – they have all other agreements with the EU to facilitate trade. 9. The parties to the interim agreement notify the Trade in Goods Council of substantial changes to the plan and timetable contained in this agreement and, upon request, the Commission reviews the amendments. 9. Preferences under Article I, paragraph 2, are not affected by the establishment of a customs union or free trade area, but may be eliminated or adapted through negotiations with the parties concerned. This procedure negotiated with the parties concerned applies, in particular, to the elimination of the preferences necessary to comply with the provisions of paragraph 8, point (a) (i) and paragraph 8, point b). This principle is called treatment of the most favoured nation (MFN) (see box). It is so important that this is the first article of the General Agreement on Tariffs and Trade (GATT) that governs trade in goods. The MFN is also a priority of the General Agreement on Trade in Services (GATS) (Article 2) and the Agreement on Trade-Related Intellectual Property Rights (TRIPS) (Article 4), although the principle is treated somewhat differently in each agreement. Together, these three agreements cover the three main areas of trade implemented by the WTO. The growing number of regional agreements and the considerable trade they cover have prompted the GATT parties to try to strengthen the multilateral discipline that exists during the Uruguayan GATT round.

The parties to the GATT have never explicitly rejected a free trade agreement, although they have expressed reservations about the consistency of certain provisions with the GATT4 requirements. The Uruguay Round Agreement on the Interpretation of Article XXIV (1994 Agreement) seeks to strengthen multilateral oversight of regional trade agreements by “specifying the criteria and procedures for evaluating new or extended agreements and improving the transparency of all XXIV agreements”. In 1996, WTO members established the Standing Committee on Regional Trade Agreements (CRTA), which reviews new and existing free trade agreements and examines the overall impact of these agreements on the global trading system6. On 14 December 2006, the WTO General Council introduced a new transparency mechanism for free trade agreements, which includes early notification of negotiations on free trade agreements.7 General Agreement on Trade in Services, Art.