Regional Trade Agreements Services

To understand the benefit of an RTA, we need to first understand the concept of WTO MFN status. The World Trade Organization which was signed between many countries in Jan 1995 brings forth a concept of “Most Favored Nation” which means that if the exporting country and the importing country both are WTO members then the importing country will give equal treatment to all the exporting country in terms of both tariff and non-tariff barriers.

Trade Agreement is nothing but a legal binding between two or more countries wherein the trading countries commits certain benefits only to their signing Partners which is not to be availed by countries outside the Agreement. This benefit can be extended to Goods - (in terms of offering a Lower or Zero Import Duty to the imports coming from countries within Agreement) - Services or Facilitation of investment and many more benefits.