Which of these trade agreements represents the highest level of integration among participating nations group of answer choices?

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Introduction

Facts and figures

As of 1 march 2022, 354 RTAs were in force. These correspond to 577 notifications from WTO members, counting goods, services and accessions separately.

Committee on Regional Trade Agreements

The Committee on Regional Trade Agreements (CRTA) considers individual regional agreements under the Transparency Mechanism for RTAs (see below). It is also mandated to hold discussions on the systemic implications of RTAs for the multilateral trading system, as was reaffirmed by WTO members at the 10th Ministerial Conference in Nairobi in 2015. The CRTA's terms of reference can be found in WT/L/127. The current Chair is .

• Read more: The WTO’s Committee on Regional Trade Agreements

Transparency Mechanism for RTAs

WTO members agreed in 2006 to implement a provisional mechanism to enhance the transparency of RTAs and understand their effects on the multilateral system. Under this process, members notify the WTO about their RTAs and these are discussed by the wider WTO membership on the basis of a factual presentation prepared by the WTO Secretariat.

At the 10th Ministerial Conference in Nairobi in 2015, WTO members agreed to work towards the transformation of the provisional mechanism into a permanent mechanism without prejudice to questions related to notification requirements.

WTO members are obliged to notify the RTAs in which they participate. All of the WTO's members have notified participation in one or more RTAs (some members are party to 20 or more). Notifications may also refer to the accession of new parties to an agreement that already exists, e.g. the notification of the accession of Croatia to the European Union.

For more detail on notifications of RTAs currently in force, consult the summary tables of the RTA Database http://rtais.wto.org/UI/publicsummarytable.aspx

Evolution of RTAs, 1948-2022

The following chart shows all RTAs notified to the GATT/WTO (1948-2022), including inactive RTAs, by year of entry into force.

A series of interactive graphs, along with the underlying data, is available from the WTO RTA Database: http://rtais.wto.org/UI/Charts.aspx

New developments in RTAs

Many WTO members continue to be involved in negotiations to create new RTAs. Like the agreements in force, most new negotiations are bilateral. However, a recent development has been negotiations and new agreements among several WTO members. This includes developments in:

• the Asia-Pacific Region, with the entry into force of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) Agreement (signed by 11 parties);
• Asia, with the signature of  the Regional Comprehensive Partnership Agreement (RCEP) between the Association of Southeast Asian Nations (ASEAN) members and six other WTO members;
• Latin America, with the establishment of the Pacific Alliance between Chile, Colombia, Mexico and Peru; and
• Africa, with the entry into force of the African Continental Free Trade Area (AfCFTA), and negotiations for the Tripartite Agreement, linking parties to the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC).

However, the vast majority of such new plurilateral agreements have not reduced the spaghetti bowl of RTAs given that they have not superseded existing bilateral agreements.

Negotiations on RTAs

Negotiations to clarify and improve WTO disciplines on RTAs fall under the work of the Negotiating Group on Rules, which reports to the Trade Negotiations Committee. The negotiations have been dormant for some time.

WTO rules on regional trade agreements

The WTO’s rules on regional trade agreements:

Trade Agreements can create opportunities for Americans and help to grow the U.S. economy.

USTR has principal responsibility for administering U.S. trade agreements. This involves monitoring our trading partners' implementation of trade agreements with the United States, enforcing America's rights under those agreements, and negotiating and signing trade agreements that advance the President's trade policy.

The United States is Member of the World Trade Organization (WTO), and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) sets out rules governing trade among the WTO's 154 members. The United States and other WTO Members are currently engaged in Doha Development Round of world trade talks, and a strong, market-opening Doha agreement for both goods and services would be an important contribution to addressing the global economic crisis and helping to restore trade's role in leading economic growth and development.

The United States has free trade agreements (FTAs) in effect with 20 countries. These FTAs build on the foundation of the WTO Agreement, with more comprehensive and stronger disciplines than the WTO Agreement. Many of our FTAs are bilateral agreements between two governments. But some, like the North American Free Trade Agreement and the Dominican Republic-Central America-United States Free Trade Agreement, are multilateral agreements among several parties.

Another important type of trade agreement is the Trade and Investment Framework Agreement. TIFAs provide frameworks for governments to discuss and resolve trade and investment issues at an early stage. These agreements are also a means to identify and work on capacity-building where appropriate.

The United States also has a series of Bilateral Investment Treaties (BITs) help protect private investment, develop market-oriented policies in partner countries, and promote U.S. exports.

Detailed descriptions and the texts of many U.S. trade agreements can be accessed through the Resource Center on the left.

A free trade agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

The concept of free trade is the opposite of trade protectionism or economic isolationism.

In the modern world, free trade policy is often implemented by means of a formal and mutual agreement of the nations involved. However, a free-trade policy may simply be the absence of any trade restrictions.

A government doesn't need to take specific action to promote free trade. This hands-off stance is referred to as “laissez-faire trade” or trade liberalization.

Governments with free-trade policies or agreements in place do not necessarily abandon all control of imports and exports or eliminate all protectionist policies. In modern international trade, few free trade agreements (FTAs) result in completely free trade.

• Free trade agreements reduce or eliminate barriers to trade across international borders.
• Free trade is the opposite of trade protectionism.
• In the U.S. and the E.U., free trade agreements do not come without regulations and oversight.

For example, a nation might allow free trade with another nation, with exceptions that forbid the import of specific drugs not approved by its regulators, or animals that have not been vaccinated, or processed foods that do not meet its standards.

The benefits of free trade were outlined in "On the Principles of Political Economy and Taxation," published by economist David Ricardo in 1817.

Or, it might have policies in place that exempt specific products from tariff-free status in order to protect home producers from foreign competition in their industries.

In principle, free trade on the international level is no different from trade between neighbors, towns, or states. However, it allows businesses in each country to focus on producing and selling the goods that best use their resources while other businesses import goods that are scarce or unavailable domestically. That mix of local production and foreign trade allows economies to experience faster growth while better meeting the needs of its consumers.

This view was first popularized in 1817 by economist David Ricardo in his book, "On the Principles of Political Economy and Taxation." He argued that free trade expands the diversity and lowers the prices of goods available in a nation while better exploiting its homegrown resources, knowledge, and specialized skills.

Few issues divide economists and the general public as much as free trade. Research suggests that faculty economists at American universities are seven times more likely to support free-trade policies than the general public. In fact, the American economist Milton Friedman said: “The economics profession has been almost unanimous on the subject of the desirability of free trade.”

Free-trade policies have not been as popular with the general public. The key issues include unfair competition from countries where lower labor costs allow price-cutting and a loss of good-paying jobs to manufacturers abroad.

The call on the public to Buy American may get louder or quieter with the political winds, but it never goes silent.

Not surprisingly, the financial markets see the other side of the coin. Free trade is an opportunity to open another part of the world to domestic producers.

Moreover, free trade is now an integral part of the financial system and the investing world. American investors now have access to most foreign financial markets and to a wider range of securities, currencies, and other financial products.

However, completely free trade in the financial markets is unlikely in our times. There are many supranational regulatory organizations for world financial markets, including the Basel Committee on Banking Supervision, the International Organization of Securities Commission (IOSCO), and the Committee on Capital Movements and Invisible Transactions.

The European Union is a notable example of free trade today. The member nations form an essentially borderless single entity for the purposes of trade, and the adoption of the euro by most of those nations smooths the way further. It should be noted that this system is regulated by a bureaucracy based in Brussels that must manage the many trade-related issues that come up between representatives of member nations.

The United States currently has a number of free trade agreements in place. These include multi-nation agreements such as the North American Free Trade Agreement (NAFTA), which covers the U.S., Canada, and Mexico, and the Central American Free Trade Agreement (CAFTA), which includes most of the nations of Central America. There are also separate trade agreements with nations from Australia to Peru.

Collectively, these agreements mean that about half of all goods entering the U.S. come in free of tariffs, according to government figures. The average import tariff on industrial goods is 2%.

All these agreements collectively still do not add up to free trade in its most laissez-faire form. American special interest groups have successfully lobbied to impose trade restrictions on hundreds of imports including steel, sugar, automobiles, milk, tuna, beef, and denim.