Free Trade Agreement Application

The creation of free trade areas is considered an exception to the most-favoured-nation principle within the World Trade Organization (WTO), since the preferences that parties to a free trade area grant exclusively to each other go beyond their accession obligations. [9] Although Article XXIV of the GATT allows WTO members to establish free trade areas or to adopt interim agreements necessary for their establishment, there are several conditions with respect to free trade areas or interim agreements that lead to the creation of free trade areas. It is also important to note that a free trade agreement is a mutual agreement, which is permitted by Article XXIV of the GATT. Autonomous trade regimes for developing and least developed countries are authorized by the decision adopted in 1979 by the signatories to the General Agreement on Tariffs and Trade (GATT) on differential and more favourable treatment, reciprocity and wider participation of developing countries (hereinafter referred to as the “enabling clause”). This is the WTO`s legal basis for the Generalised System of Preferences (GSP). [13] Free trade agreements and preferential trade regimes (as indicated by the WTO) are considered to be most-favoured-nation derogations. [14] The purpose of preferential origin is to exempt or reduce customs duties on exports to a free trade country. This is documented by a movement certificate or a country of origin declaration on invoice. These rules govern trade in industrial products (HS Chapter 25-97), fish and processed agricultural products. Trade in unprocessed agricultural products tends to be governed by separate bilateral agricultural agreements. Benefits of agreements The agreements concluded in 2013 with free trade partners, with the exception of the free trade agreement with the EU, cover 22.6% of total Swiss exports. This represents 51% of Swiss exports to markets outside the EU. In particular, free trade agreements promote the growth, added value and competitiveness of the Swiss economic location.

Free trade agreements have reduced the prices of products for Swiss consumers and increased the supply of products. At the same time, Swiss producers benefit from lower prices for semi-produced products and raw materials. Generally speaking, trade diversion means that a free trade agreement would divert trade from more efficient suppliers outside the area to less efficient suppliers within territories. On the other hand, the creation of trade implies that a free trade agreement creates trade that might not otherwise have existed. In any case, the creation of businesses will improve the national well-being of a country. [15] Why would you take care of it? The United States has negotiated trade agreements with 20 countries to facilitate the flow of goods across the border where your customer is located….