THE WTO AND TRADE LIBERALIZATION ON A REGIONAL LEVEL

GATT was the basis for founding the World Trade Organization (WTO), which came into force on 1 January 1995. The WTO is a legal organization embodying a set of rules of conduct for international trade policy. This multilateral trade system took a relatively long period of time to develop ; it has been 47 years since the WTO was founded. The main tasks of the WTO are managing trade agreements, providing a forum for trade negotiations, resolving commercial disputes, supervising national trade policies, providing technical assistance for developing countries and collaborating with other international agencies. The WTO allows for three types of preferential trade arrangements: a free trade area, a customs union and a common market. The concept of the most-favored nation in Article 1 of the GATT prohibits implementing a discrimination trade policy between member states. The GATT allows members to form agreements that eliminate, rather than reduce, trade barriers within integration. Regional trade agreements often involve measures or rules that are different or go beyond the WTO's rules and fall under a broader spectrum of trade regulations, ranging from trade to government procurements. Also, countries sometimes find more useful for their own development to integrate regionally rather than multilaterally. The issue is whether or not regional trade agreements converge to a multilateral standard, or whether they increase the likelihood of different approaches. The proliferation of regional trade agreements represents a challenge for the multilateral liberalization and the strength of the WTO and this paper analyses whether there are reasons for concern.