The History Of Preferential Trade Agreements Essay

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B The History of Preferential Trade Agreements 1 Traditional PTAs Historically, trade agreements had been signed before World War II. To begin with, the Cobden-Chevalier Treaty of 1860 was concluded as a means of opening the French market to British manufacturers, stimulating a series of liberalising trade agreements among the European countries. In 1930, the Netherlands, Denmark, Norway and Sweden established the Dutch-Scandinavian Economic Pact as a means of protecting themselves from economic crisis. Later, the United States enacted the Reciprocal Trade Agreements Act in 1934 to conclude trade agreements with country with Latin American countries, Canada and the United Kingdom. After World War II, The establishment of the GATT 1947 supported the formation of PTAs. The GATT 1947 stipulated the implementation of the nondisriminatory principle, meaning that any concessions towards one member had to be equally given to all members of the GATT. However, Pursuant to Article XXIV (4), the GATT 1947 allowed its contracting parties to enter into PTAs as long as these PTAs have goals ‘to facilitate trade between the constituent territories and not to raise barriers to the trade of other contracting parties with such territories’. Article XXIV (5) then added that the duties and other regulations of commerce imposed by PTAs ‘...shall not on the whole be higher or more restrictive than the general incidence of the duties and regulations of commerce applicable in the

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