Multilaterialism or regionalism: challenges of religional trade/agreements between WTO members

Introduction
Conclusion
List of literature

Multilaterialism or regionalism: challenges of religional trade/agreements between WTO members

For the separate countries, first of all small and developing, RTS are essential from the point of view of protection and safety particular in the conditions of globalization. Membership in RTS can be considered as means of attraction of investments, especially for the countries with cheap labor.
Supporters of RTS underline the advantages following from Expansions of scales, a competition and attraction of investments in Larger economy. In spite of the fact that liberalization in RTS is a secondary problem, it can become unique a possibility, if liberalization is impossible in this sphere on the multilateral level or can't be reached because of contradictions.5
RTS can serve as range for innovations and a basis for acceptance of new trade rules at multilateral level. Creation regionalblocks promotes strengthening of degree of an external openness both to creation and trade expansion. In works of many economists six arguments in protection of regional trade association are put forward:
1. Liberalization and mainly unification and removal non-tariff restrictions within the f integration associations is faster, than within the limits of all world trading system. It can be considered as a basis for further liberalization,
Seldom the decisions accepted at level of grouping, are subject of revision towards deterioration.
2. Besides, very many measures on liberalization, it is fulfilled and checked up in regional scales, have been transferred in WTO practice.
3. Initiatives on regional integration are good stimulus for the further active work of officials and politicians at the international level.
4. Regional and preferential agreements created bases for trade development, regional liberalization and accelerates these processes and facilitates their regulation.
5. Regional mechanisms frequently allow to tighten economic development level of weaker region for the account of stronger economically partners.
6. Many integration associations promote the decision of difficult political conflicts which couldn't be solved.6
One of arguments against RTS is that integration associations promote closeness and a trade diversification. In this case criticism of a regionalism confirms the following.7
First, in the course of integration creation trade creation prevails that block effective diversification and also doesn't allow to reach optimum in placing resources on a global scale.8
Secondly, participants’ regional and preferential agreements are not interested in further liberalization that can lead to diversification of commercial relations (for example, African countries supported struggle of EU against the decision The Uruguayan round of GATT to lower duties on the tropical goods).
Thirdly, within the limits of some integration associations the system of the protectionist directed is developed, protection against the goods occurring from the third countries.
Fourthly, the great attention given to the intraregional problems, distracts politicians from participation in the decision universal problems so-called diversification of interests is taking place .9
Negative effects of the RTAs towards regionalism stress its potential to fragment the multilateral trading system (MTS) into a number of closed, competing blocs. As these blocs expand, so does their market power and thus the incentive to influence the terms of trade in their favor, providing an incentive to use trade policy to restrict imports. This argument assumes that the trade blocs are customs unions and have a common trade policy, when in fact the emerging continental blocs tend to take the form of free trade areas (FTAs). Also, there is no evidence to date to suggest RTAs have pursued this incentive to raise external barriers.10
Regionalism also has a tendency to beget regionalism as outsiders attempt to minimize the costs of trade diversion by becoming insiders. This has given rise to the new phenomenon of overlapping RTAs which increase their complexity and their relationship with the MTS. One highlighted issue is the negative effects on trade of differing rules of origin, and the way in which rules of origin can be designed to have a protectionist impact. There is also the danger that, as countries pursue deeper integration within RTAs, dispute settlement provisions contained in the ‘new generation’ RTAs could build jurisprudence conflicting with that of the WTO.
Conclusion
With increase in quantity of RTS and expansion of trade and economic spheres which they regulate, in a legal field of multilateral trade there are more and more openings which conduct to occurrence of new trading barriers, discrimination between the countries-participants and not participants.