Why are almost all the countries signing Free Trade Agreements?

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Countries negotiate Free trade Agreements for a number of reasons – By eliminating tariffs and some non-tariff barriers FTA partners get easier market access into one another’s markets. Exporters prefer FTAs to multilateral trade liberalization because they get preferential treatment over non-FTA member country competitors. For example in the case of ASEAN, ASEAN has an… Read more »

How is CECA/CEPA different from FTA?

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A Comprehensive Economic Cooperation Agreement (CECA) or a Comprehensive Economic Partnership Agreement (CEPA) is different from a traditional Free Trade Agreement (FTA) on two counts. Firstly, CECA/CEPA are more comprehensive and ambitious that an FTA in terms of coverage of areas and the type of commitments. While a traditional FTA focuses mainly on goods; a… Read more »

How are Rules of Origin enforced in an FTA?

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The rules of origin are enforced through a certificate of origin that is issued by authorised agencies of the trading partner. An exporter cannot avail of the customs tariff preferences under the FTA without submitting this certificate of origin from the authorised agency. International Trade Law includes the appropriate rules and customs for handling trade… Read more »

Why are rules of Origin important in the FTA context?

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The Rules of Origin are important in the context of making an assessment on the application of preferential tariff under an FTA. Hence, without the rules of origin, the preferential tariffs under an FTA cannot be implemented. Moreover, the nonmembers to the FTA are not provided with the benefit of the preferential tariffs, agreed between… Read more »

Where can one find tariff concessions available in India’s FTAs?

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Information on India’s FTAs including the tariff concessions thereof is available in the website of the Department of Commerce at www.commerce.gov.in. Further, a web portal “India’s Trade Compendium” has been developed which provides insights into India’s trade (both MFN and preferential) through the following information – Classification of goods at disaggregated HS levels has been developed… Read more »

How is CECA and CEPA different from FTA?

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A Comprehensive Economic Cooperation Agreement (CECA) or a Comprehensive Economic Partnership Agreement (CEPA) is different from a traditional Free Trade Agreement (FTA) on two counts. Firstly, CECA/CEPA are more comprehensive and ambitious that an FTA in terms of coverage of areas and the type of commitments. While a traditional FTA focuses mainly on goods; a… Read more »

How is tariff reduction under an FTA different from WTO tariff negotiation?

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For the purposes of FTAs, the “base rate” is the critical element in all aspects of negotiations/phasing that are carried out. The base rate is the applied MFN duty of any year which is decided mutually. In an FTA tariff reduction is generally undertaken with reference to the base rate i.e. from the applied MFN… Read more »