The session examined new innovations in RTAs, and how can they inform the work being done at the multilateral level in order to promote more inclusive trade and economic growth. We looked specifically at how new disciplines in RTAs are helping to promote SMEs, improve the functioning of GVCs and the interplay between trade and technology.
These disciplines can benefit the multilateral trading system, but to take advantage of best practices, governments, private sector leaders and policy makers need to engage in dialogue and information sharing in a coordinated manner. Tools like the RTA Exchange – an initiative developed in the context of the E15 Initiative’s Group of Exerts on RTAs – can help this process by facilitating the exchange of information and negotiating experiences, and promoting greater dialogue in order to identify ways in which best practices can be multilateralised, and where opportunities for cooperation and convergence exist.
Ricardo MELÉNDEZ-ORTIZ, Chief Executive, ICTSD
Bernard HOEKMAN, Professor and Director of Global Economics, European University Institute
Lucian CERNAT, Chief Trade Economist, European Commission
Theresa CARPENTER, Executive Director, Graduate Institute Geneva’s Centre for Trade and Economic Integration
Jonathan T. FRIED, Ambassador and Permanent Representative of Canada to the WTO
On 21-22 November, ICTSD in partnership with the Inter-American Development Bank (IDB) organised a dialogue on inclusive rules of origin (RoO). The meeting represents the first in a series of RTA Exchange dialogues set to take place over the course of 2016 and 2017 to systematically explore possibilities for convergence and coherence-building between regional trade agreements (RTAs) and the multilateral trading system.
RTAs have been a driving force behind recent trade liberalisation efforts and the formation of many global value chains (GVCs). However, RTAs also create limitations for both countries inside and outside a trading block due to their rules of origin. The complexity and variety of RoO that exist today represents a challenge for many firms seeking to participate in production networks across various trade agreements. Empirical evidence suggests that strict rules of origin often result in the sub-optimal functioning of value chains by disincentivising the use of cheaper parts and materials from third countries. Complex and diverse sets of RoO have also affected the ability of developing countries including least developed countries (LDCs) to fully benefit from the enhanced market access granted through preferential schemes or negotiated under their RTAs.