21 Feb, 2022
Preferential Trade Agreements Are Generally Tolerated
Posted by: Hector Danilo Pompa Dominique In: Uncategorized
Preferential trade agreements (PTAs) have been a topic of debate for years. These agreements are made between two or more countries to give preferential access to certain products or services. The concept of PTAs is to boost trade and create favorable economic conditions for each participating country. However, despite the benefits, PTAs have been criticized by some experts and activists for having certain disadvantages.
One of the main criticisms of PTAs is that they lead to discrimination against non-participating countries. Countries that are not part of the agreement may not have access to the same benefits and may be at a disadvantage when it comes to international trade. Additionally, some argue that PTAs can lead to job losses and increased income inequality because they often involve the removal of trade barriers such as tariffs, which can lead to cheaper labor costs in participating countries.
Despite these concerns, PTAs are generally tolerated and continue to be popular among countries looking to boost trade. In fact, the number of PTAs has increased significantly over the past few decades. According to the World Trade Organization (WTO), there are currently more than 400 PTAs in force worldwide.
So why are PTAs so widely accepted, even with the potential drawbacks? The answer lies in the fact that they have proven to be effective in achieving their intended goals. PTAs have been successful in promoting trade and economic growth. For example, the North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States has been credited with boosting trade between these countries and creating jobs in the region.
Moreover, PTAs have helped to reduce trade barriers, which can be beneficial for both participating countries and non-participating countries. By making trade more accessible, PTAs can contribute to the growth of global trade and the reduction of poverty in developing countries.
In conclusion, while PTAs are not perfect, they remain a popular and effective tool for boosting international trade and economic growth. Countries will continue to enter into these agreements despite the criticisms, as they believe that the benefits outweigh the potential drawbacks. Therefore, it is important to continue to monitor the impact of PTAs and ensure that all countries, including those outside the agreement, can benefit from international trade.
