Diplomatist Magazine Diplomatist April 2018 - Page 7

COVER STORY A free trade agreement seeks to establish free trade of goods or services between the participating countries by reducing or eliminating barriers to trade. The barriers to trade could be tariffs such as custom duties or non-tariff such as license, subsidies and quotas. A large number of countries have entered in some sort of economic integration with other countries, giving rise to intra-group trade, along with growing multilateralism. The various forms of trade groups include preferential trading agreement, free trade area, customs union, common market, economic union, and political union, depending upon their level of economic integration. In recent years, countries around the world are forging Preferential Trade Agreements (PTAs) and Free Trade Agreements (FTAs) beyond contiguous geographical boundaries and creating ‘spaghetti bowl’ or ‘noodle bowl’ structures and complex cob of incoherent rules. India is no exception to such PTAs and participates in a number of agreements. Regional Trade Agreements (RTAs) under WTO's Multilateral Framework The multilateral initiatives under the WTO rest on the principle of non-discrimination, the two main pillars being the MFN and the national treatment. Under the WTO agreement, countries cannot discriminate between their trading partners as Article 1 of GATT defi nes the Most Favored Nation (MFN) principle of WTO as ‘any advantage, favour, privilege, or Extraordinary and Plenipotentiary Diplomatist • Vol 6 • Issue 4 • April 2018, Noida • 5