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Annual Report 2011-12
:: PRESS RELEASES
Regional Trade Agreements Could Act As An Effective Gateway To Global Trade: Exim Bank Study
With the growing importance of regional trade agreements (RTAs) in promoting the liberalisation and expansion of trade and investment and economic development, RTAs are also being viewed as a key link between developing and developed countries and as a gateway to global trade, according to an EXIM Bank Study. RTAs have rapidly proliferated in recent times and presently more than one third of the world's trade takes place within the framework of such regional trade agreements; free trade agreements (FTAs) being a preferred form of trade agreement among countries, followed by economic integration agreements (EIAs). The Exim Bank study also notes that regional and multilateral agreements could be complementary and mutually reinforcing approaches to trade reforms.
The growing interest in RTAs among countries has been particularly noticed since the dawn of the new millennium, with 60% of all agreements entering into force post 2000. The growing number of EIAs, along with an upsurge in number of FTAs, indicates the increasing preference among countries to deepen bilateral economic integration beyond trade in goods. The study also notes that there has been a gradual, yet clear, shift in the global pattern of trade agreements from south-south agreements to agreements between developing and developed countries.
The study observes that the countries engaged in most number of trade agreements are Mexico, Singapore, Chile, United States and Turkey with engagements in 19, 18, 17, 15 and 10 agreements respectively. Investigation of the trade pattern of these countries over the past decade clearly attests to the positive impact of RTAs on the trade performance of a country. Moreover, trade with RTA partner countries constitutes a major portion of the total trade of these countries, as in case of Mexico and Singapore, whose trade with RTA partner countries constitute around 85% and 63% of their global trade respectively, which emphasises the importance of RTAs in global economic integration of these countries. India's endeavour to foster its international trade has been well complemented by its efforts to promote regional trade. The study also notes that India's trade with its RTA partner countries as a share in its total trade has shown a decent rise from 20% to 30% from 2001-02 to 2006-07.
EXIM Bank study recommends that after careful assessment of long term implications arising out of engagement in RTAs, India should adopt an integrated approach consistent with its long term interests and potential by exploring bilateral and plurilateral trade initiatives in simultaneity with its pursuits towards eventual multilateralism. Following the global pattern of shift from south-south trade agreements to agreements between developing and developed countries, India too should explore new trade partners like US, EU and Japan and continue its ongoing efforts in this direction. It has also been suggested that India look beyond FTAs in goods and widen the scope of such agreements by incorporating services, investment, monetary cooperation and trade logistics.
For further information, please contact
David L. Sinate
Export-Import Bank of India
Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade,
Telephone: 2217 2829,
Fax: 2218 2572;