What do Regional Trade Agreements mean for quality infrastructure?

The number of Regional Trade Agreements (RTAs) entering into force has steadily increased over the past two decades (see figure below). This continuous growth has been interpreted as a reaction to the Multilateral Trading System (MTS) crisis, which has raised concerns about the future of Quality Infrastructure.

However, the rules on conformity assessment set out in the World Trade Organization’s Agreement on Technical Barriers to Trade (hereafter referred to as the WTO TBT Agreement) [1] are very elaborate and have been incorporated in several RTAs. This may suggest that conformity assessment, and QI as a whole, remain unaffected by the MTS crisis.

The following RTA’s have referred to the WTO TBT Agreement in treating conformity assessment matters [3]:

• The United States – Mexico – Canada Agreement (USMCA): Chapter 11

• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Chapter 8

• European Union (EU) – Southern African Development Community (SADC) Economic Partnership Agreement (EPA): Chapter 5

• Central European Free Trade Agreement (CEFTA): Chapter 4

• Free Trade Agreement (FTA) between European Free Trade Association (EFTA) States and Central American States: Chapter 2

• FTA between EFTA States and the Gulf Cooperation Council (GCC): Chapter 2

• Caribbean Forum (CARIFORUM) – EU EPA: Chapter 6

• Peru-Australia Free Trade Agreement: Chapter 7

Regardless of the reference to the conformity assessment rules stated in the WTO TBT Agreement, the RTA have some shortcomings: 

• The TBT Agreement does not define the term “international standard [4], “making it difficult for trading partners to agree on mutual recognition of specific standards.

• Bilateral and regional trade agreements have expanded the duty to notify. A duty that is limited under the WTO TBT Agreement. 

• The unique and differential treatment for developing countries is weak and impossible to use practically.

• Dealignment between regional and international rules weakens the implementation of the WTO TBT Agreement.

• Technical standards are given greater weight than general trade regulations.

  
  

In conclusion, standards, metrology, and conformity assessment, in short quality infrastructure, are similarly important in implementing RTAs as in the WTO-TBT. RTAs provide the opportunity to develop regional QI with all its specific benefits. These include regionally recognised systems, harmonised technical regulations and coordinated development of QI services based on cooperation. 

However, if RTAs are developed as an alternative to all-inclusive international trade rules, there is a risk of systemic incompatibilities and, ultimately, higher transaction costs for companies. The goal of once certified or tested and accepted everywhere would thus be weakened. In this respect, a multilateral trade system (MTS) remains the first best solution for all actors involved.

References

[1] https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm (Retrieved 03/03/23)

[2] http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx (Retrieved 03/03/23)

[3] WTO RTA Database,  http://rtais.wto.org/UI/PublicSearchByCr.aspx (Retrieved 03/03/23)

[4] Charnovitz, Steve (2005) International Standards and the WTO, GW Law Faculty Publications & Other Works. 394, https://scholarship.law.gwu.edu/faculty_publications/394

* This post has received comments from Ann-Sara Ramkissoon, Christian Schoen and Ramón Madriñán Rivera. Many thanks!

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