These tariff preferences have led to many departures from the principle of normal trade relations, namely that members of the World Trade Organization (WTO) should apply the same tariff to imports from other WTO members. [1] A preferential trade zone (including preferential trade agreements, PTA) is a trading bloc that gives preferential access to certain products from participating countries. This requires a reduction in tariffs, but not in their total abolition. A ZEP can be implemented through a trade pact. This is the first step in economic integration. The border between a EPZ and a Free Trade Area (EEA) can be blurred, as almost all ATPs have the main objective of becoming a free trade agreement in accordance with the General Agreement on Tariffs and Trade. Since the beginning of the 20th century, several hundred bilateral THPs have been signed. The Canada Research Chair in International Political Economy`s TREND project[6] lists approximately 700 trade agreements, the vast majority of which are bilateral. [7] Given the recent proliferation of bilateral TTPs and the emergence of mega-PTAs (broad regional trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), a global trading system managed exclusively under the WTO now seems unrealistic and interactions between trade systems must be taken into account.
The increasing complexity of the international trading system resulting from the proliferation of EPZs should be taken into account when considering the choice of countries or regions used by countries or regions to promote their trade relations and environmental agendas. [2] ATPs have grown rapidly; In the 1990s, there were just over 100 PTAs. In 2014, there were more than 700. [3] In 2004, Scott Baier and Jeffrey Bergstrand published that there were three economic determinants for the formation of PTA. Countries are more likely to participate in ATPs when they have lower transportation costs and larger economies. Third, countries of similar economic size should benefit the most from PTA training. Economic determinants such as GDP, similarity in economic size and distance between countries rightly predict more than 80% of the PTA from 2020. [3] The remaining PTAs may be attributed to political preachers. Countries under democratic rule are more likely to participate in PTAs than autocracy. Autocratic leaders are not elected and have therefore not threatened their power by disgruntled citizens. Democratic leaders are encouraged to satisfy their constituents and PTAs can help drive down the price of consumer goods.
Support for ATPs also allows democratic leaders to signal to voters that they are committed to a policy that improves their well-being. Countries are also more likely to join ATPs if competing countries have already done so. [3].