Regional trade agreements must not make it harder to do business
 |
| Patchwork is fine for fashion designers - but not so good for trade agreements |
Paris, 4 December 2002 - The International Chamber of Commerce (ICC) has urged the World Trade Organization to ensure that regional or bilateral trade agreements avoid increasing the complexities of doing business internationally.
The world business organization singled out the proliferation of preferential rules of origin under such agreements and said they tended to raise costs and stifle technological development, the formation of business networks and joint manufacturing.
Lars Anell, who heads ICC Commission on Trade and Investment Policy, said: "Companies are finding it increasingly difficult to cope with different and complex preferential rules of origin in today's global economy, in which companies depend on the rapid delivery of products and components from many different sources, often for assembly in a third country."
In a statement to the 145 governments that make up the WTO, the ICC Commission said that regional and bilateral agreements should strengthen momentum towards global economic integration in the WTO. "They can be important building blocks for future multilateral trade liberalization."
The statement was against the background of a recent spate of separate free trade agreements, with a score of negotiations currently under way involving countries in every continent. It provides business input into Doha Trade Round negotiations on improving existing WTO rules on regional trade agreements.
A total of 162 regional trade agreements are currently in force. ICC trade experts expect as many as 200 new agreements to be added by 2005, posing a growing challenge for the multilateral trading system embodied in the WTO.
Acknowledging that agreements confined to trading partners and neighbours were only to be expected, ICC said: "Regional or bilateral agreements may bring faster results than the multilateral process."
The ICC statement added: "While continued reduction of barriers to trade under the WTO will erode preferential trade arrangements over time, regional trade agreements must maintain and strengthen momentum towards global economic integration.
"ICC firmly supports the WTO principle that such agreements be in concordance with WTO rules and that objective assessments to that effect take place."
Regional trade agreements and the multilateral trading system