The preferential trade agreement requires the least commitment to removing trade barriers Trade barriers are legal measures taken primarily to protect a country`s national economy. They generally reduce the amount of goods and services that can be imported. These barriers are put in place in the form of tariffs or taxes and, although Member States do not remove barriers between them. There are also no common trade barriers in preferential trade zones. The creation of free trade zones is seen as an exception to the most privileged principle of the World Trade Organization (WTO), since the preferences of the parties to the exclusive granting of a free trade area go beyond their accession obligations.  Although GATT Article XXIV authorizes WTO members to establish free trade zones or to conclude interim agreements necessary for their establishment, there are several conditions relating to free trade zones or interim agreements leading to the creation of free trade zones. Regional trade agreements refer to a treaty signed by two or more countries to promote the free movement of goods and services beyond the borders of its members. The agreement contains internal rules that Member States comply with each other. As far as third countries are concerned, there are external rules to which members comply. Regional trade agreements have the following advantages: Regional trade agreements (ATRs) have multiplied over the years and are succeeding, including a significant increase in the major multi-lateral agreements being negotiated. Non-discrimination between trading partners is one of the fundamental principles of the WTO; However, reciprocal preferential agreements between two or more partners are one of the exceptions and are allowed by the WTO subject to a number of provisions. Information on WTO-notified ATRs is available in the RTA database.
Trade agreements open many doors. With access to new markets, competition intensifies. Increasing competition is forcing companies to produce better quality products. It also leads to greater diversity for consumers. If there are a variety of high quality products, companies can improve customer satisfaction. Deep trade agreements are an important institutional infrastructure for regional integration. They reduce business costs and set many rules in which economies are active. If designed effectively, they can improve political cooperation between countries and thus promote international trade and international investment, economic growth and social well-being.
Studies by the World Bank Group show that companies in Member States benefit from greater incentives to trade in new markets through the strategies contained in the agreements. It is also important to note that a free trade agreement is a reciprocal agreement that is authorized by Article XXIV of the GATT. Autonomous trade agreements for developing and least developed countries are permitted by the 1979 decision by the signatories of the General Agreement on Tariffs and Trade (GATT) („empowerment clause”) on differentiated and more favourable treatment, reciprocity and increased participation of developing countries. It forms the legal basis for the WTO`s Generalized Preference System (GSP).  Free trade agreements and preferential trade agreements (as mentioned by the WTO) are considered an exception to the MFN principle.  So far, you have seen international organizations such as the WTO, the IMF and the World Bank support world trade, but that is only part of the story.