Preferential trading area

"Preferential trade agreement" redirects here. For the usage of the term by the World Trade Organization, see Trade pact § By the World Trade Organization.

A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. A PTA can be established through a trade pact. It is the first stage of economic integration. The line between a PTA and a free trade area (FTA) may be blurred, as almost any PTA has a main goal of becoming a FTA in accordance with the General Agreement on Tariffs and Trade.

These tariff preferences have created numerous departures from the normal trade relations principle, namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members.[1]

List of preferential trade areas

Stages of economic integration around the World (each country colored according to the most integrated form that it participates with):
  Economic and Monetary Union (CSME/EC$, EU/, Switzerland–Liechtenstein/CHF)
  Common market (EEA–Switzerland, ASEAN)

A free trade area is basically a preferential trade area with increased depth and scope of tariffs reduction. All free trade areas, customs unions, common markets, economic unions, customs and monetary unions and economic and monetary unions are considered advanced forms of a PTA, but these are not listed below.

Multilateral

Bilateral

See also

References

  1. CRS Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition - Order Code 97-905
  2. From 18 March 1981 LI5342
  3. From 1 January 1981 WT/COMTD/N/29

External links

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