Regional agreements
Pending a conclusion of the Doha negotiations, greater resources are being devoted to negotiations of bilateral and regional agreements to open up trade.
In recent years, many countries, including the US, Japan, Singapore and other countries in Asia and Latin America, have become involved in a greater number of free trade negotiations. This contributes to more open world trade and leads to welfare gains, primarily for those parties that have entered into agreements. At the same time, the competitiveness of companies from the countries that do not take part is reduced.
The EU is currently involved in a process of discussing and questioning its previous wait-and-see approach towards new free trade agreements. A reappraisal of this kind would not entail a change of principle by the EU, but would allow active efforts to begin negotiations with countries and regions that are considered to be of interest for expanded trade relations.
The EU has entered into a large number of bilateral and regional agreements with many of the Mediterranean countries as well as with Mexico, South Africa and Chile. At present, the EU is conducting negotiations with Mercosur (Argentina, Brazil, Uruguay and Paraguay), the Gulf States (Gulf Cooperation Council), Serbia and Montenegro, Bosnia and Herzegovina, and the ACP countries (African, Caribbean and Pacific States).
Bilateral initiatives can supplement multilateralism
- Regional and bilateral agreements can supplement the multilateral free trade efforts in the WTO. There is no inherent conflict between these.
- The agreements can be formulated in a way that facilitates further cooperation in larger country groupings and multilateralisation. This in particular places demands on the formulation of rules of origin, other rules and standards.
- Compatibility with WTO regulations is of vital importance.
