W5P1 (video): Regional Trade Agreements and the Trading System Flashcards

1
Q

What is the legal basis for Regional Trade Agreements within the WTO framework?

A

RTAs are legal under Article 24 of GATT/WTO

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2
Q

What is the ‘spaghetti bowl problem’ associated with RTAs?

A

the ‘spaghetti bowl problem’ refers to the overlapping and complex rules of origin due to numerous RTAs

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3
Q

How do RTAs benefit trade liberalization compared to WTO agreements, according to Gary Hufbauer

A

RTAs reduce trade barriers faster than WTO agreements, addressing areas like services and investment, and often lowering tariff barriers to zero

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4
Q

What are Bhagwati’s concerns about developing countries signing RTAs with bigger entities?

A

Bhagwati is concerned that developing countries might sign unfavourable terms with larger entities like US and EU

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5
Q

What are the potential misleading aspects of preferential agreements?

A

Preferential agreements can be misleading as they might offer only temporary benefits that do not account for long-term impacts.

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6
Q

Why does Gary Hufbauer believe both RTAs and the multilateral system are permanent features of global trade?

A

Hufbauer believes both systems are permanent because they are integral to current global trade dynamics

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7
Q

What challenge does the session highlight regarding the alignment of RTAs and global trade?

A

The challenge is to align RTAs with the global trade framework such that smaller nations are supported and not disadvantaged

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8
Q

How many Regional Trade Agreements are currently in existence, and what systemic issue does this cause?

A

Around 400 RTAs are in existence, causing complication in global trade and challenging the Most Favoured Nation (MFN) principle

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9
Q

What does MFN mean in global trade?

A

The Most Favoured Nation (MFN) principle is based on the idea that countries should treat all their trade partners equally- that no one country should be “more favoured”

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10
Q

What systemic issue do RTAs cause for the WTO according to Jagdish Bhagwati?

Reduce trade volume
Complicate global trade
Discourage domestic production
Enhance monopolies

A

Complicate global trade

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11
Q

How to RTAs address trade areas, according to Gary Hufbauer?

By focusing solely on goods
By sidestepping services
By including services and investment
By prioritizing agriculture

A

By including services and investment

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12
Q

What challenges does the WTO face in reaching agreements during the trade rounds?

Insufficient funding

Lack of leadership

Unanimous decision-making and complex issues

Too many participants

A

Unanimous decision-making and complex issues

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13
Q

What does Gary Hufbauer say about the permanence of RTAs and multilateral systems?

RTAs are temporary solutions

Only multilateral systems are permanent

Both are permanent

Neither are permanent

A

Both are permanent

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14
Q

What is the possible loner-term impact on developing countries if RTAs are too narrowly focused?

They can become self-sufficient

They can lose out on potential development gains

They will enhance international relations

They will reduce inflation

A

They can lose out on potential development gains

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15
Q

Why does Bhagwati remain optimistic about the Doha round despite his criticisms of RTAs?

He believes in rapid technology adoption

He sees potential for synchronized tariff reductions

He has faith in multilateral negotiations

He believes unilateral decisions are best

A

He has faith in multilateral negotiations

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16
Q

According to the discussion, how do RTAs potentially benefit small developing countries?

By isolating them from global markets

By making them dependent on a single trade partner

By integrating them into larger economic systems

By reducing exposure to technological innovations

A

By integrating them into larger economic systems

17
Q

What is the perspective on the future of RTAs in relation to global trade, according to the conclusion?

They will become obsolete

They are a challenge but necessary adjustments

They will overtake the WTO completely

They will focus exclusively on developing countries

A

They are a challenge but necessary adjustments