Analysis on the Development and Influence of Overlapping Free Trade Agreement1/ANALYSES SUR LE DÉVELOPPEMENT ET LES INFLUENCES DU CHEVAUCHEMENT DES ACCORDS DE LIBRE ÉCHANGE

By Cheng, Xinxuan; Wang, Ying et al. | Canadian Social Science, January 1, 2009 | Go to article overview

Analysis on the Development and Influence of Overlapping Free Trade Agreement1/ANALYSES SUR LE DÉVELOPPEMENT ET LES INFLUENCES DU CHEVAUCHEMENT DES ACCORDS DE LIBRE ÉCHANGE


Cheng, Xinxuan, Wang, Ying, Liu, Yongliang, Canadian Social Science


Abstract:

Since the 1990s, FTAs(FTA)have developed rapidly, and overlapping free trade agreement comes into being naturally. The overlapping free trade agreement causes multiple duplicate of rules of origin as well as reduces the economic efficiency of the operation of FTAs; industries in the area bring about cohesive effect in hub country, and specialization effect of decentralization in spoke countries; the phenomenon of overlapping free trade agreement complicates the relationship between FTA and multilateral trade system (MTS), making the occurrence of transitional institutional arrangement possible in the process of upgrading from FTA to Customs Union.

Key words: Overlapping; Free Trade Agreement; Rules of Origin; Customs Union FTA

Résumé: Depuis 1990, FTAs ( FTA ) s'est développée rapidement et le chevauchement des accords de libre-échange apparaissent. Le chevauchement des accords de libre-échange génère de multiples duplicata de règles d'origine ainsi que l'affaiblissement de l'efficacité économique des opérations de FTAs; les industries dans la région engendrent des effets cohésifs dans les pays-centres et des effets de spécialisation à cause de décentralisation dans les pay s-satellite; le phénomène du chevauchement des accords de libre-échange complique les relations entre FTA et le système d'échange multilatéral (MTS) en rendant possible l'occurrence des arrangements institutionnels traditionnels dans le processus d'actualisation de FTA à la union douanière.

Mots-Clés: chevauchement; accord de libre-échange; règles d'origine; union douanière; FTA

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Globalization brings both benefits and serious uncertainty risks to every country. In order to obtain trade creation effect brought by regional preferential arrangement and reduce risks brought by the opening up at the same time, regional economic organization becomes important strategic choice for many countries. At present, the form of regional economic organization embodies mainly in Customers Union, FTA, common market and economic & monetary union. Most of the regional organizations are still in the stage of Customs Union or FTA, in which, the FTA becomes the first choice for many countries due to its characteristics such as limitation of sovereignty transfer, directness of benefit attaining, easiness of agreement-reaching, etc. For that reason, at the end of 1990s, many overlapping free trade agreements came into being. The rocketing development of this phenomenon will bring about significant influence upon the operation of regional economic organizations and MTS.

1. DEVELOPMENT OF OVERLAPPING FREE TRADE AGREEMENT

Overlapping free trade agreement is a special phenomenon emerged in the later part of 1990s during the development of FTA. In the last century, there emerged two climaxes for the development of regional trade agreement; the first one emerged in the 1930s while the second one emerged in the 1980s. The international environments, in which the second regional trade agreement boom, have undergone dramatic changes, which mainly embody in: the degree of trade liberalization for finished products of developed countries increase greatly; many developing countries are giving up the strategy of anti-trade and anti-market- system and participating actively in the MTS; direct foreign investment occupies the main position in foreign economy. On this background, many countries all wish to obtain huge actual economic benefits by establishing FTA. As it is stated in WTO report that by the end of July, 2007, the number of regional trade agreement notified to WTO increased from 50 in the 1990s to 380, increasing almost 8 times. In which, 205 of agreements are under implementation. Before 2010, the number will increase to about 400. By the end of 2007, the trade volume between countries in the area had accounted for about 50% of the global trade volume. Many member countries of WTO participate in more than one free trade agreements, which leads to the emergency of multitude of overlapping free trade agreements. …

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Analysis on the Development and Influence of Overlapping Free Trade Agreement1/ANALYSES SUR LE DÉVELOPPEMENT ET LES INFLUENCES DU CHEVAUCHEMENT DES ACCORDS DE LIBRE ÉCHANGE
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