When it comes to the third basic requirement, which is that, in general, barriers should not increase for third parties, things become more complicated. Given that free trade agreements are much more widespread than customs union unions, it seems that this is not the case. With regard to free trade agreements, there is no need to negotiate a common external tariff and the tariff applicable to non-parties should not change in general. But there are other channels through which discrimination against outsiders under free trade agreements can increase. The first potential problem arises when developing countries apply tariffs below the maximum levels they should not exceed under WTO rules. This gives them the flexibility to erect barriers to third parties, while respecting or maintaining preferential tariffs for free trade partners. Mexico`s trade response to the 1994 peso crisis is a striking example, when it did so in the context of the implementation of NAFTA. 18 Other studies have shown that free trade agreement partners are more likely to use remedial measures against allegedly unfair trade (anti-dumping and countervailing duties) against outsiders than against each other. 19 Baldwin and Thornton, 5. For more information on the rules governing global supply chain trade in the 21st century, see Richard Baldwin (2011) `21st Century Regionalism: Filling the Gap between 21st Century Trade and 20th Century Trade Rules`, WTO Staff Working Paper, No. ERSD-2011-08, Geneva: WTO.
Following the notification of the Japan-Mongolia Free Trade Agreement in 2016, the WTO says that each member now participates in at least one regional or bilateral trade agreement. 13 The EU is the most active RTA negotiator with nearly 100 agreements in force, followed by East Asia with 80 ATRs. Other regions, with the exception of South America (57), are all less than 50 for the number of RTAs in force (Figure 3.2). By 2031, Peru and Honduras will liberalize about 99 percent of their customs positions on imports. In addition, the liberalization of trade in services goes beyond the respective obligations of the parties under the WTO`s general agreement on trade in services. Peru said the agreement would open up a predictable legal framework for all business activities and would open up new opportunities for small businesses. Bilateral trade reached only $66 million in 2019, but this figure is expected to increase in the post-pandemic phase, Peru added. Members also discussed the product aspects of the ASEAN-Republic of Korea Free Trade Agreement, which came into force on 1 January 2010.
The product aspects of the agreement will also be discussed at a forthcoming meeting of the Committee on Trade and Development. In 2018, the commission looked at aspects of trade in services. Regional trade agreements (ATRs) have multiplied over the years and have achieved, including a significant increase in major multilateral agreements being negotiated. Non-discrimination between trading partners is one of the fundamental principles of the WTO; However, reciprocal preferential agreements between two or more partners are one of the exceptions and are allowed by the WTO subject to a number of provisions. Information on WTO-notified ATRs is available in the RTA database.