the general timetable established for virtually allnegotiations under the Doha Declaration … ‘The 2003 fifth MinisterialConference in Mexico is to take stock of progress, provide any necessarypolitical guidance, and take decisions as necessary.’
6. TRADE IN SERVICES AND REGIONAL INTEGRATIONAlthough numerous empirical analyses are available on the costs and benefitsof forming RIAs in goods, those in services have been ignored. Theoreticalresearch is almost non-existent in the area of impact of unilateral, regional andmultilateral liberalization in trade in services and the relationship betweenthem. As the formal models deal only with border measures, they fail tocapture the reality of a large part of trade in services. This is, for sure, unusual.Of the large number of the RIAs that were negotiated during the second waveof regionalism in the 1990s, a large proportion had a services dimension.Intellectual curiosity in this regard has been low so far. Although attractingFDI is considered one of the crucial motives behind the entry into RIAs, thereis little theoretical work that develops a link between FDI inflows and RIAcreation. It is also possible that most analysts think that we really do not needa new trade theory or analytical approach to grapple with trade in servicesrelated issues, particularly costs and benefits from RIAs in services. However,conventional trade theories that deal with trade in goods are not totallyinapplicable to trade in services.The analysis of RIAs in services does require an extension of conventionaltheory for two reasons. Mattoo and Fick (2003) have pointed out that tradein services ‘require proximity between supplier and consumer, we need to
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consider preferences extended not only to cross border trade, but also toforeign direct investment and foreign individual service providers’. Second,the basic requirement of creating an RIA is to provide preferential treatmentto members. In the case of trade in services it could be granted not throughtariffs (which are infrequent, if not rare, in services trade), but throughrepealing of restrictions on the movement of labor and capital (in terms ofquantity or share of foreign ownership), and a variety of domestic regulationssuch as technical standards, licensing and qualification requirement. Thus thepreferences in trade in services are given to RIA members through differentinstruments from those used in trade in goods. This has an impact over bothproduct and factor mobility (Mattoo and Fick, 2003).The implications of repealing restrictions on factor mobility in a preferentialmanner and providing preferential treatment (or liberalization) to theconstituent members of the RIA depends on whether this preferentialtreatment is for the short term, for meeting a particular trade-in-servicesrequirement, or relatively permanent. In the former case, where thepreferential treatment to the services providers (consultants or constructioncompanies) is on a temporary basis, the arrangement resembles that forpreferential treatment in trade in goods. That is, the services were carried tothe importer as if they were goods. Having delivered the services, the supplierof services withdraws from the scene.The other extreme is the scenario where the RIA is the kind that entailscomplete integration of product and factor markets, as in case of the EU andthe Caribbean Community and Common Market (CARICOM). Severalintermediate scenarios are also feasible, for instance, limited permanentmovements of individual suppliers of services through immigration andpermanent movement of capital by way of FDI. Such movements directlyaffect the factor endowments of the members of the RIA. In such cases‘the positive impact will depend on the specificity of the factors that move andthe normative impact on the extent to which incomes are repatriated’ (Mattooand Fick, 2003). In an RIA arrangement, the manner in which privilegedmarket access can be granted by one constituent member to another willdepend upon the instruments of protection that are being employed for aparticular kind of trade in services. The examples given below clarify howdifferent instruments of protection determine the mode of RIA integration inservices:1.
When an economy imposed quantitative restrictions on trade in servicesor on the number of services providers, its preferred treatment for themembers of the RIA would entail allocating higher quotas. In the case oftransport services (air, road and maritime) many economies allocatefreight and passenger quotas on a preferential basis. Similarly, in
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audiovisual services, preferential quotas of airtime are allocated to preidentified foreign programs.2. A member of the RIA can also lower restrictions on foreign ownership,type of legal entity, and branching rights for the other members on apreferential basis. For instance, when the NAFTA was formed, Mexicoremoved ownership restrictions on financial institutions from the othertwo member countries of NAFTA (Canada and the US). Typically,foreigners are given percentage limits on ownership of financialinstitutions. The financial institutions based on other countries are notgiven this privilege. Interestingly, European banks benefited indirectlyfrom this preferential treatment of the members of NAFTA because manyof them had a presence in the US.3. Domestic taxes and subsidies are another mode of executingdiscrimination policies in trade in commercial services. Many countriesassure the other members of the RIA national treatment in this regard. Theother foreign providers of services are not given this preferentialtreatment. They are subject to different tax rates and do not have access todomestic subsidies.4. Preferential treatment to members of the RIA can also be granted throughlicensing and qualifications requirements, domestic regulations pertainingto technical regulations, and general TBT measures. In many countrieslicensing and qualifications requirements are imposed on foreign servicesproviders. However, these requirements are waived for those foreignproviders who are part of the RIA. This amounts to de facto preferentialtreatment of services firms from the RIA. Regulatory practices and normsin sectors like transport, insurance and financial services can also bewaived for the services firms from the member countries. Requirementslike proofs of solvency and utilization of chartered accountants trained ina particular country come under this category.With regard to welfare gains from regional trade liberalization in services, theimplications of gains from liberalization in trade in goods cannot be directlyextended to those in services. Non-preferential liberalization, ceteris paribus,is sure to produce larger gains than regional trade liberalization, which entailspreferential liberalization for the constituent members of the RIA (Mattoo andFick, 2003). Non-discriminatory liberalization neither limits nor biasesconsumer choices. It allows the least-cost, or most competitive, producer ofservices to be the most successful exporter. In a hypothetical situation whereall the exporters of services are the least-cost producers, the welfare gains forthe global economy are enormous. Furthermore, non-discriminatoryliberalization leads to a less complex policy regime than the one based onpreferential discrimination for the members of the RIA. By the same token, the
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former regime has lower administration costs for the government agencies andlower transaction costs for the firms than the one based on preferentialdiscrimination.If liberalization measures were initially aimed at RIA formation, with afuture plan for their expansion to the global economy, the benefits of eventualmultilateral liberalization would be lower than those achieved by nondiscriminatory liberalization from the start. The reason is that in the case ofmany services, the location-specific ‘sunk costs of production’ are high formany services firms. Therefore, even after the privilege of being a regionalmember dissipates, the less competitive or inferior producer, continues tosupply to the regional market. The inferior producer, who was established inthe regional market, also hinders the market entry of the more efficientservices providers outside the region, unless their competitive advantage is solarge that it offsets the advantage of the incumbent services provider (Mattooand Fick, 2003).6.1 GATS and Economic Integration AgreementsEconomic integration agreements (EIAs) are the preferential trade agreementsin the area of commercial services.32 By March 2002, 18 EIAs were notified tothe WTO under the GATS Article V (WTO, 2002b). Article V of the GeneralAgreement on Trade in Services (GATS) is equivalent to the Article XXIV ofthe GATT and lays down the regulations. Article V provides liberty to thesignatories of the GATS to enter into an agreement liberalizing trade inservices. Country groups are not prevented from forming RIAs, againprovided such an agreement has ‘substantial sectoral coverage’ and providedsuch an agreement provides for the absence or elimination of ‘substantially alldiscrimination’ in the sense of Article XVII between or among the parties, inthe sectors covered. This can be achieved through elimination of existingdiscriminatory measures. In addition new discriminatory measures can beprohibited after the entry into force of an agreement or ‘on the basis of areasonable time-frame’.Article V of the GATS also lays down that where developing economies areconstituent members of an EIA, flexibility should be provided in meeting theconditions set out in Article 1, Paragraph 1, which relate to elimination of alldiscriminatory measures. Before elimination of discriminatory measures thelevel of development of the member country should be taken intoconsideration as well as the level of development of the services sectors andsub-sectors. If all the members of an EIA are developing economies, ‘morefavorable treatment may be granted to juridical persons owned or controlledby natural persons of the parties to such an agreement’.Article XXV of the GATS, which is on waivers, provided the GATT basis
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for several GATS agreements (Das, 2000a; WTO, 1995, 1998). Furthermore,Article V, Paragraph 4, of the GATS sets out detailed parameters of servicestrade liberalization for integration agreements. These requirements have beenthoughtfully laid down to keep control over the effect of an EIA on the nonmember economies. Accordingly, the new set of trade barriers, which cameinto being after the formation of the EIA, cannot be higher or more restrictivethan before the EIA was formed.6.2 Expansion of Trade in Services and the GATSThe services sector not only dominates the industrial economies, it alsoaccounts for more than 50 percent of GDP in countries like Argentina,Colombia, Peru, the Philippines, and Poland. For some years, commercialservices have accounted of some 20 percent of the world trade on the balanceof-payment basis. According to the 2002 Annual Report of the World TradeOrganization, merchandise exports worldwide were $6162 billion in 2001,while exports of services amounted to $1440 billion, which was 18.99 percentof the total world trade in 2001, even though that was a bleak year for trade incommercial services and there was little rise in the value of trade in servicescompared to the previous year. The decrease in the value of transportation andtravel services was not fully compensated by the rise in the value of othercommercial services, comprising inter alia, communication, insurance, andfinancial services as well as royalties, licenses and fees.Until the Uruguay Round, commercial services were not seriouslyconsidered for inclusion in a round of MTNs. Discussions and informationexchanges between the contracting parties of the GATT in this regard werehighly informal. However, exports of commercial services went on expandingrapidly. Their value was $62.9 billion in 1970, $362.8 billion in 1980, and$751.6 billion in 1990. The value of exports of commercial services soared to$1435 billion in 2000, falling to $1440 billion in 2001. Since 1990, serviceshave been the fastest growing segment of world trade. The value of exports ofcommercial services almost doubled between 1990 and 2000.33 This wasdespite contraction (of 1.5 percent) in world trade in merchandise in 1998.By creating the GATS, the Uruguay Round brought services into the fold ofthe multilateral trading system. Since the launching of the Uruguay Round,numerous developing economies have initiated liberalization movements thatcovered their commercial services sectors as well. This trend was a naturalextension of a broader reform movement focusing on trade in goods. By theearly 1990s, developing economies were liberalizing their servicestransactions faster than the industrial economies (Das, 2001).As a group, the industrial countries have been the largest traders incommercial services.34 This does not imply that developing countries do not
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have a significant stake in the performance of international trade in services.Importance of the services sector in the developing economies in termsof GDP, employment and trade has been gradually rising. China was thelargest services exporter among developing countries in 2001, accounting for2.2 percent of world services exports. Over the last three decades, developingcountries as a group have recorded faster growth of trade in commercialservices than industrial economies. Among the developing economies, thedynamic East and Southeast Asian economies have been posting the mostrapid expansion in trade in commercial services.Establishment of the GATS was a first step towards creating acomprehensive framework to liberalize and regulate trade in commercialservices. The obligations of individual countries under the GATS werespecified in their ‘schedule of specific commitments’ to market access, whichalso provided a list of exceptions. These schedules are an integral part of theagreement. The GATS operations have a long way to go. The degree ofliberalization of global trade in services has been relatively meager, with manyGATS schedules involving simple standstill commitments. Interestingly,informal liberalization progressed further than the commitments in the GATS.There is still considerable scope of further global liberalization of trade incommercial services. As the Uruguay Round was not able to concludenegotiations in all the services sectors and it was felt that there is enormousroom for improvement, it was decided to continue negotiations immediatelyafter the entry into force of the GATS.In March 1997, 40 countries agreed to eliminate customs duties on trade ininformation technology products beginning 1 July 1997, and eliminatingtariffs altogether by 2000. International trade in these products amounted to$600 billion in 1997. Negotiations on basic telecommunications services weresuccessfully concluded in February 1998. Sixty-nine countries agreed towideranging liberalization measures. Financial services negotiations wereconcluded in December 1998. Seventy countries agreed to open their financialservices sector covering more than 95 percent of trade in banking, insurance,securities, and financial information. The agreement on financial servicesentered into force in March 1999.6.3 The Doha Ministerial Conference and the GATSMany key obligations in the GATS apply only to those services for which thecountries concerned have made liberalization commitments in its ‘schedule ofspecific commitments’. During the Uruguay Round, it was hoped that the nextround of MTN negotiations in trade in services would focus attention onimprovements in rules, but their primary emphasis would be on extending thereach of the rules by adding to the coverage of WTO members’ services
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schedule (Das, 1998a). In January 2000, under Article XIX of the GATS,negotiations were initiated on the proposals submitted by the members. Theproposals covered a wide range of services sectors as well as horizontal issues,and included issues related to movement of natural persons.A set of Guidelines and Procedures for the Negotiations was adopted by theCouncil of Trade in Services in March 2001 as a basis for continuing futurenegotiations. The Doha Ministerial Conference, held in November 2001,subsequently reaffirmed them. The Doha Communiqué (World TradeOrganization, 2001a) reconfirmed the commitment of the GATS to furtheringnegotiations in trade in services, repeating the objective of ‘promoting theeconomic growth of all trading partners and the development of the leastdeveloped countries’. It also reaffirmed the objectives of the GATS asstipulated in the Preamble, Article IV and Article XIX of the GATS. Theparticipants to the Doha Ministerial Conference were given the time limit of30 June 2002 to submit initial requests for specific commitments under theGATS.Strengthening Article VI of the GATS, which provided the basic frameworkfor minimizing trade distortions created by domestic regulations, should beone of the important objectives of the Doha Round of MTNs. This Articlestated, ‘In sectors where specific commitments are undertaken each membershall ensure that all measures of general application affecting trade in servicesare administered in a reasonable, objective and impartial manner’. Astrengthened version of this Article, and a clearer interpretation, could go along way in facilitating market access liberalization by committing membercountries to the reform of regulations that impede trade and competition in theservices sectors. Under the amended version of Article VI, member countriescan be asked in the Doha Round to establish procedures for the review ofregulations at the request of the exporters of services. The Doha Roundnegotiations need to ensure that the amended version of Article VI is based ontransparent criteria, which are not more burdensome than necessary to ensurethe quality of services that are exported.
7. DUAL-PRONGED DEVELOPMENTS IN SINGAPOREISSUESWhile there have been concerns regarding the incompatibility between therule-based multilateral trading system and preferential regional agreements,there can also be complementarity between them. This can be found in the areaof international trade known as the Singapore issues, which includeinvestment, competition and trade facilitation-related issues.35 FDI was animportant issue in the context of economic development. In the 1980s it
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became an important issue in the context of financial globalization as well.FDI began to be perceived as one of the new modes of global integration. FDIstatistics show that it outpaced both growth rate of global trade and GDP in the1980s and 1990s. These developments and perceptions made it imperative tohave an international framework of rules in this important area, although manyCPs were not in favor of including FDI-related issues in the MTNs and theGATT during the decade of 1980s. After a great deal of resistance from somecontracting parties, the Uruguay Round succeeded in placing investmentissues on the multilateral trade agenda. Around the same period, several largeRIAs began focusing on the negotiations on rules on regional investment.These negotiations picked up momentum during the 1990s.In making regulatory provisions, bilateral investment treaties dominated theFDI scenario. In 2000, close to 2000 BITs were in operation.36 FDI-relatedissues at the bilateral or regional level could also be addressed through RIAsand other plurilateral (having three or more members) arrangements. A typicalRIA was not the principal vehicle for negotiating investment-related rules inthe past, although a small and growing minority of them began to deal withthem in the 1990s. They now represent one of several important institutionalsettings in which FDI-related rule-making is taking place.Competition is the second important Singapore issue and RIAs are knownto play a significant regulatory role in this area. Competition-relatedregulatory provisions exist in almost all RIAs, which includes RIAs betweenand among industrial and developing economies. A gradual consensusregarding the appropriateness of competitions-related provisions emergedamong the members of RIAs, although it is still an issue for debate at theglobal level. It should, however, be emphasized that RIAs are only one of themany fora where competition-related regulations and policies are dealt with.The United Nations and OECD are also actively involved in this area. Theformer is involved through the United Nations Set of Multilaterally AgreedPrinciples and Rules for Control of Restrictive Business practices. NumerousOECD Recommendations are also put out from time to time.Similarly, in the area of trade facilitation, RIAs have remained active. TheWTO defines trade facilitation as the ‘simplification and harmonization ofinternational trade procedures’. It entails ‘activities, practices and formalitiesinvolved in collecting, presenting, communicating and processing datarequired for the movement of goods in international trade’. The regionalinitiatives in trade facilitation have ranged from mandatory to voluntary.International bodies like the World Customs Organization (WCO), UnitedNations Conference on Trade and Development (UNCTAD), and UnitedNations Economic Commission (UN-ECE), in turn influenced them forEurope. As the RIAs have started dealing with these issues only recently,comprehensive regulatory provisions in this area are at an early stage of
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development. The older RIAs concentrated on tariffs and excludedsimplification and harmonization of trade procedures. Only a small number ofRIAs have started addressing import, export and border-crossing proceduresin sufficient detail. Awareness of cumbersome procedural intracacies undulyincreasing costs and reducing efficiency is promoting increasing attention totrade facilitation. An interesting illustration is the efforts initiated by the AsiaPacific Economic Cooperation (APEC) forum, in which members havedevised a set of voluntary principles to be used by regional firms for reducingprocedural burdens in mutual trade. The newly born bilateral trade agreementsor the economic partnership agreements have assigned a great deal ofimportance to trade facilitation. The Japan–Singapore Economic PartnershipAgreement (JSEPA) and the Free Trade Area of the Americas (FTAA) testifyto this new approach (Heydon, 2002).While RIAs have played a complementary role in developing policies andmaking regulatory provisions in the area of three Singapore issues, they havealso gone beyond the provisions of the WTO. How far they went beyond themultilaterally agreed regulatory provisions could not be generalized because itvaried from one RIA to another and from one issue to another. Variousinstances and their extent of ‘going beyond’ have been documented in detailby Heydon (2002).
8. CONTINGENT PROTECTION MEASURES IN RIAsDuring the 1990s, a surge was noticed in contingent protection measures, inparticular anti-dumping measures (ADMs). Although they are considered themost divisive instrument of protection, they are used as a substitute forcountervailing duties, which are often more difficult to apply. Although theUruguay Round agreement on ADMs, as set out in GATT-1994 Article VI,was expected to scale ADMs back, expectations of improvement on this countwere belied. Between 1988–90 and 1991–94, the use of ADMs by the CPsnearly doubled from 384 to 730. This number dropped to 508 during 1994–97and it was believed for a short time that the Uruguay Round agreement onADMs was making the difference, but this optimism turned out to beephemeral. In the three years ending June 2001, use of ADMs leapt to 825, thehighest ever three-year level. Although it has been a highly controversial issuein the past, it has been included in the agenda for the Doha Round.37Based on the WTO data, a study examined 29 RIAs and APEC over the1989–2001 period for initiating internal and external ADM against theconstituent members of the RIAs as well as non-members (WTO, 2002b;Spinanger, 2002). This study calculated the degree to which RIAs directedtheir contingent protection activities at other members and at the third
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countries. For NAFTA, the share of ADMs against the members steadilydeclined over time. Conversely, MERCOSUR and APEC were found to applyADMs to non-members more easily. This study did not provide anyconclusive evidence of members of RIAs initiating more ADMs against nonmembers because some of them provided evidence to the contrary.
9. CONCLUSIONS AND SUMMARYSome trade economists believe that RIAs contribute to a liberal global tradingsystem and, to that end, strongly support regional integration. Expansion ofRIAs could have positive effects on the global economy provided theemerging RIAs are ‘open’ to trade from outside. Open regionalism canpromote and facilitate external liberalization, meaning trade with non-membereconomies outside the RIA. Thus viewed, RIAs are complementary as well assupplementary to multilateralism. Not all concur. Besides, the RIA route of aliberal global trading system is far from an easy and smooth process. Therecan be myriad of problems along the way. The developing economies, whichwere largely antithetical towards RIAs in the past, have had a change of mind.Presently, developing-country perspective on regionalism is radically differentfrom the one that prevailed during the first wave of regionalism in the 1950sand 1960s.It is believed by the trade economists that accession to RIAs liberalized thetrade regimes of developing economies. To examine whether there is directlink between liberalization and RIA accession, an intertemporal study of 75RIAs was undertaken (Foroutan, 1998). The inference was that economies thatbecame members of effective RIAs had liberalized their trade regimes. Thisdid establish a direct link between trade liberalization and RIA membership.However, it was difficult to determine how much of causality can be attributedto RIA participation. Since the mid-1980s there have been many countries thatliberalized their trade regimes significantly without being members of anyRIA. But if acceptance of a liberal trade policy regime is a requirement of anRIA membership, it can be said that this kind of RIA generally succeed incausing liberalization of the trade regime of the members. With advancingage, RIAs tended to deepen by way of removing trade barriers, including nontariff barriers.With such a large number of RIAs in operation, a great deal of global tradeis influenced by RIAs. Quantifying trade under various preferential tradeagreements is not easy. It faces methodological problems. Besides, one cannotignore the fact that not all trade among the members of an RIA necessarilycomes under a preferential trade regime. Sometimes economic and administrative costs of meeting all the requirements of the rules of origin (ROO)
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within an RIA are high. It is, however, agreed by the trade economists thatintra-RIA trade has gone on increasing over the preceding two decades andcould soon ‘account for more than half’ of the world trade. Preferential tradein agricultural products recorded a large increase. The share of trade under theGeneralized System of Preferences in total preferential trade recorded asignificant fall, from 7 percent to 3 percent over the last two decades. Thisreflected the general decline of trade under GSP worldwide. The regionaldistribution of preferential trade was found to be highly uneven. WesternEurope had the highest share of preferential trade. Latin America had muchlower value, while Asia and Oceania had a still lower proportion ofpreferential trade. Finally, it was noted that countries that have highly openeconomies also tended to have a lager share of preferential trade. Trade undervarious preferential agreements is expected to grow in the foreseeable futurebecause several significant expansions and new initiatives were underway inthe early 2000s.Western Europe has the densest concentration of RIAs in the globaleconomy. The network of RIAs, particularly FTAs, between the EU andneighboring regions is noteworthy. They account for almost half of the totalRIAs in the world. In May 2004, the EU will have 10 more members. Next toEurope, concentration of RIAs is most dense in Latin America. In sub-SaharanAfrica, regional integration endeavors have been going on but they have notgained momentum. Their progress was unsteady and could not be ascertainedbecause of the complex web of overlapping RIAs and their memberships. Aspointed out in section 3, the former Soviet Union economies have formedseveral RIAs among themselves. In some RIAs they included their neighborsas well. In addition, some bilateral trade agreements have been entered intoand they have agreed to working towards formation of a CU at some time inthe future. Historically, Asian economies were known for their strong bias forMFN-only trade liberalization. However, Asia has undergone a considerabletransformation in this regard. In forming APEC, they moved away from theirlong-standing historical preference for MFN-only liberalization. AlthoughAPEC adopted ‘open regionalism’, it began to be counteracted by members’drive towards preferential trade initiatives. Several successful traders in thisregion (Japan, South Korea and Singapore) took initiatives for entering intobilateral preferential agreements as well as for creating RIAs amongthemselves.During the early 2000s, several pluri-dimensional and inter-linked issueswere the subjects of raging debates among the members of the WTO. Someage-old economic chestnuts were the focus of attention of the members. Forinstance, Article XXIV of the WTO has a requirement regarding ‘substantiallyall the trade’ between the constituent members of an RIA being covered.Wordings and their interpretation have long been discussed. Second, some
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institutional issues were also part of the ongoing debates. They related toanomalies between rules in RIAs and those in the WTO system. Third, severalimportant economic issues continue to generate a good deal of disagreementand debate among the WTO members. The impact of regional agreements onthe constituent members and non-members has been debated since theVinerian initiative.The superstructure of multilateral trade regulations is squarely based on theclassical economic principle of comparative advantage, enshrined in the MFNprinciple. Any form of regional integration contravenes the MFN principle.And yet a provision for RIAs was included in the superstructure of multilateraltrade regulations. The GATT and WTO allowed members to conclude RIAsas an exception to the fundamental principle of non-discrimination set out inthe MFN clause of Article I. One reason for allowing this deviation from theMFN principle was accommodating reality. The WTO literature demonstratesthat genuine free trade agreements and customs unions were viewed aspossibly compatible with the MFN clause in the past. Little wonder thatArticle I, Paragraph 2, of the GATT-1947 had explicitly exempted from theMFN requirement, all the RIAs in force at the time the GATT came into effect.Multilateral regulations of the GATT and WTO on RIAs reflect the founders’desire to accommodate and provide for such agreements. In doing so, theywere cautious in guarding the trading interests of the non-RIA members. Theyensured that RIAs were compatible with a ‘rule-based and progressively moreopen world trading system’.Several trade analysts hold the view that in reality Article XXIV is the onewhich is partly responsible for the difficulties in further multilateral tradeliberalization. They believe that those who argued against the ability of ArticleXXIV to support free trade in the global economy did not make a convincingcase and did not allow the structure of RIAs to affect free trade in theirmodels.38 It is also unclear whether Article XXIV is in accord with theprinciple of reciprocity.Under the GATT regime, the multilateral examination of RIAs wasconducted in individual working groups set up in an ad hoc manner forperforming this task. The WTO attempted to bring consistency and uniformityto this examination. Therefore, the WTO General Council established a singlecommittee named the Committee on Regional Trade Agreements (CRTA) toexamine individual regional agreements and consider the systemicimplications of the agreements for the multilateral trading system and therelationship between them.The ministerial communiqué of 14 November 2001 from Doha, inParagraph 4, stressed the commitment of the WTO members to regional tradeagreements. The Doha Declaration highlights the importance of regionalismas well as its place in the multilateral trading system. However, despite a
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successful launching, the progress in MTNs by mid-2003 was poor and severaldeadlines could not be met.Few empirical analyses of costs and benefits of RIAs in the area of trade andservices are available. Econometrist