Study On Regional Trade Arrangement From The Theoretical And Practical Perspective

Since the 1980s, global economic integration has become an irreversible trend, the regular rules pattern which is implemented within one country is broken, resources, labor force, trade, capital and other factors are put into the whole world market with unified rules. The economic integration develops both globally and regionally, it operates in some global and regional institutions with respect to the international legal regime, such as the World Trade Organization, International Monetary Fund, World Bank, Asian Pacific Economic Corporation, North America Free Trade Area, European Union, Latin American Common Market, and West Africa Community, etc. These institutions and the international legal regimes have interwoven and formed a netted legal system. As one part of global economic integration, regional economic integration is playing a very important role in the current liberalization of international trade. Regional legal system is a key factor to the integration and plays the important role. Since the 1990s, some new regional trade agreements and trade arrangements have been concluded not only between the neighboring countries, but also by some countries in different continents and/or with different economic development levels.The development of regional trade arrangement (RTA) influences and impacts the multilateral free trade system, which is established on the foundation of the non-discrimination principle and most-favored nation treatment principle. The most-favored nation treatment principle is the foundation of GATT/WTO multilateral free trade system, but similar to other legal principles and rules, this principle is also permitted to certain exceptions inevitably. As we know, regional trade arrangement has many types, such as preferential trade arrangements, free trade areas, customs unions, common market, economic unions and complete economic integration. Most regional trade arrangements are in the form of free trade areas, 84% in all RTAs.The economic reason for the vigorous development of RTA is that people think RTA can raise economic efficiency. From the perspective of multilateral free trade system's development process, in July, 2008 WTO Doha round negotiation in the Geneva Conference formally announced failure just because the developing countries and the developed countries could not come to terms with each other. When multilateral free trade system encounters some setbacks, the RTA is developing fleetly in the global scope. In fact RTA plays a vital role to promote the international trade although some people criticized that RTA would result in trade diversion. But the supporters of RTA advocate that RTA has the positive role to the multilateral free trade system. Regional integration will promote global integration, because regional integration is comparatively easy to realize. RTA will contribute successful experience to global economic integration and multilateral free trade system. On the other hand, the discommenders of RTA think RTA would tend to internal trade protection and hinder the development of global integration. It is important that how the multilateral free trade system regulate the RTA so as to ensure trade liberalization. As a comparatively new Member of WTO and a freshman in RTA, China faces the issue of how it is going to deal with the relationship properly between multilateral free trade system and RTA.This doctoral dissertation focuses on the study of RTA from the theoretical and practical perspective. The author quotes and analyzes the rules of GATT/WTO concerning the RTA, and reviews the development process of RTAs and practically introduces the RTAs: EC/EU, APEC, NAFTA, ASEAN and CAFTA and so on. Through researching on the foundational theories and practical activities of RTAs mentioned above,the author attempts to gain deeper understanding about RTA rules and give suggestion to enhance Chinese abilities in participating in the international competition. No matter it is multilateral free trade system or the RTA, China should be familiar with all the rules and regimes, make full use of the current system and opportunities and play an important role within the RTA in which China participates and the multilateral WTO system.The dissertation consists of seven parts, including the introduction, five chapters and the conclusion. In the introduction section the author mainly introduces the purpose of this research project, research methods, and the structure of this dissertation.In the first chapter, on the basis of summarizing the concept of RTA from not only an economic perspective but also a political perspective, the author discusses the economic and political reasons, as well as the features and development trends of RTAs under the WTO multilateral system. It is pointed that there are several rules concerning RTA in the multilateral free trade system: GATT 1947 Art. 24, Understanding on the Interpretation of Art. 24 of GATT 1994, GTAS Art. 5 and the Enabling Clause (Tokyo Round). Also this chapter introduces the influential RTAs in the world that affect the international trade and play a very important role in the nowadays world economy.In the second chapter, the author mainly adopts the empirical method to focus on the development of EC/EU. Firstly the chapter introduces EC/EU's development process, its institutional structure and its basic characteristics and some essential legal principals; and then analyzes the specific legal system about internal and external trade policies. Beginning from the introduction to the EC/EU's arrangements on free flow of capital and labor force, competition law and so force, this chapter also figures out the characteristics of EC/EU's economic integration legal system. EC/EU is the highest stage of RTA in the world, it is an outstanding model to regional economic and political integration with respect to international and supranational features. EC/EU contributes many theories and practical experience concerning regional free trade liberalization to WTO and its Members. In the third chapter, the author observes the model of open regionalism- APEC, reviewing all the development periods so as to ascertain the APEC's institutional structure, the resolution-implementation mechanism, the decision-making mechanism and etc. Especially the author analyzes the legal system regarding trade, investment, and cooperation of economy and technology. APEC has the similar object and tenet as WTO, such as promoting the trade liberalization, non-discrimination, transparency and consensus in principle.In the fourth chapter, the author discusses the new RTA in Asia area- CAFTA. It is the first free trade area for China to construct with ASEAN from 2002. As a new member in RTA and in WTO, China has to learn from experienced RTA members in the world, such as NAFTA, EC/EU, APEC and ASEAN. Nowadays CAFTA is establishing its legal system on trade arrangement of goods and service, investment and its dispute settlement mechanism. To 2010 CAFTA will be constructed successfully and will be the free trade area with the biggest population in the world. In the fifth chapter, the author mainly analyzes the relationship between RTA and multilateral free trade system. There are many points of view about this issue: conflict or harmonize? The author thinks that RTA has the dual impacts on WTO multilateral system. The positive aspect is that it accumulates experience for WTO about free trade arrangement; on the other hand RTA could hold back the development of multilateral system. It is possible that the two systems coexist harmoniously so as to give the members more opportunity to expand their economic development.The last section is conclusion. The author comes to her conclusion: the two systems could coexist in the world and it is essential to very country to deal with the relationship between multilateral trade system and RTA appropriately. China should play a more positive role not only in WTO multilateral system but also in RTA.