Free Trade Agreements and Foreign Direct Investment

Regionalism in international trade and investment Although the global multilateral trading system represented by the World Trade Organization (WTO) provides a regulatory framework for international trade today, as of May 2010, 320 regional trade arrangements (RTAs) are also in force. RTAs have a significant impact on international trade today because more than 90% of WTO Members, including developing-country members, have signed at least one or more RTAs. The trade of a majority of developing-country members is thus affected by the terms of RTAs as well as WTO disciplines. The trade of developing countries not participating in particular RTAs may also be affected by the terms of these RTAs because the competitive position of their exports in the markets of RTA members can be relatively weakened by the trade preference offered to the members but not to nonmember developing countries.