What do Regional Trade Agreements mean for quality infrastructure?

The number of Regional Trade Agreements (RTAs) entering into force has steadily increased over the past two decades (see figure below). This continuous growth has been interpreted as a reaction to the Multilateral Trading System (MTS) crisis, which has raised concerns about the future of Quality Infrastructure.

However, the rules on conformity assessment set out in the World Trade Organization’s Agreement on Technical Barriers to Trade (hereafter referred to as the WTO TBT Agreement) [1] are very elaborate and have been incorporated in several RTAs. This may suggest that conformity assessment, and QI as a whole, remain unaffected by the MTS crisis.

Chart, histogram

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Figure: RTAs currently in force, 1948-2023. Source: WTO (2023)

The following RTA’s have referred to the WTO TBT Agreement in treating conformity assessment matters [3]:

  • The United States – Mexico – Canada Agreement (USMCA): Chapter 11
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Chapter 8
  • European Union (EU) – Southern African Development Community (SADC) Economic Partnership Agreement (EPA): Chapter 5
  • Central European Free Trade Agreement (CEFTA): Chapter 4
  • Free Trade Agreement (FTA) between European Free Trade Association (EFTA) States and Central American States: Chapter 2
  • FTA between EFTA States and the Gulf Cooperation Council (GCC): Chapter 2
  • Caribbean Forum (CARIFORUM) – EU EPA: Chapter 6
  • Peru-Australia Free Trade Agreement: Chapter 7

Regardless of the reference to the conformity assessment rules stated in the WTO TBT Agreement, the RTA have some shortcomings: 

  • The TBT Agreement does not define the term “international standard [4], “making it difficult for trading partners to agree on mutual recognition of specific standards.
  • Bilateral and regional trade agreements have expanded the duty to notify. A duty that is limited under the WTO TBT Agreement. 
  • The unique and differential treatment for developing countries is weak and impossible to use practically.
  • Dealignment between regional and international rules weakens the implementation of the WTO TBT Agreement.
  • Technical standards are given greater weight than general trade regulations.

In conclusion, standards, metrology, and conformity assessment, in short quality infrastructure, are similarly important in implementing RTAs as in the WTO-TBT. RTAs provide the opportunity to develop regional QI with all its specific benefits. These include regionally recognised systems, harmonised technical regulations and coordinated development of QI services based on cooperation. 

However, if RTAs are developed as an alternative to all-inclusive international trade rules, there is a risk of systemic incompatibilities and, ultimately, higher transaction costs for companies. The goal of once certified or tested and accepted everywhere would thus be weakened. In this respect, a multilateral trade system (MTS) remains the first best solution for all actors involved.

References

[1] https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm (Retrieved 03/03/23)

[2] http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx (Retrieved 03/03/23)

[3] WTO RTA Database,  http://rtais.wto.org/UI/PublicSearchByCr.aspx (Retrieved 03/03/23)

[4] Charnovitz, Steve (2005) International Standards and the WTO, GW Law Faculty Publications & Other Works. 394, https://scholarship.law.gwu.edu/faculty_publications/394

* This post has received comments from Ann-Sara Ramkissoon, Christian Schoen and Ramón Madriñán Rivera. Many thanks!

The QI4D blog aims to disseminate knowledge and exchange around the quality of infrastructure worldwide. Please, use the reply function to continue and deepen the debate. Also, let us know with a like if you think the article is particularly relevant.

This entry was posted in Quality Infrastructure, Standards, Technical Regulations, Trade, World Trade Organization and tagged , , , , , by Dr. Ulrich Harmes-Liedtke. Bookmark the permalink.

About Dr. Ulrich Harmes-Liedtke

Dr Ulrich Harmes-Liedtke is a global expert in the field of international economic development cooperation. With more than 25 years of consulting experience, he is active in all phases of a project and program development (preparation, implementation, monitoring, and evaluation) and collaborates with various implementing organizations and development banks (German Development Cooperation - GIZ and PTB -, Inter-American Development Bank, European Union and United Nations). He has consulting experience in Africa, Asia, Europe, Latin America and the Caribbean. Dr.Harmes-Liedtke is an experienced trainer and process consultant. He works with groups and teams to reflect on their situation and to then formulate change projects to improve their reality. He enables dialogue, facilitates and designs workshops, processes, and sense-making processes. He is certified in facilitation, mediation, and communication techniques which allow him to deal with sensitive, diverse, and even conflict situations. He supports systemic economic development in various roles: • As an expert and trainer in international trade, national quality policies, industrial policy, clusters, and global value chains • As a process consultant in designing and leading diagnostic processes that result in change, adaptation, and improvement • As a facilitator of dialogue, workshops, training, and sense-making processes • As a transdisciplinary researcher in the field of systemic economic development Born 1965, Ph.D. in political science and economics (Bremen 1999), MA in economics (Diplom-Volkswirt) (Hamburg 1991). German nationality.

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