IS THERE STILL A FUTURE TO THE REGIONAL TRADE AGREEMENTS?

Regional Trade Agreements (RTAs), are Treaties between two or more states to liberalize mutual trade or other economic relations. Among such RTAs the European Union is the largest one and most complex, including 28 member states with developed high levels of trade, monetary and economic cooperation in 2018. Generally RTAs follow the idea that more free trade and more liberal environment for other economic cooperation activities among the integrated states create an environment enabling additional and accelerated economic growth of member states, together with some other positive structural and economic gains. After1992 the number of newly registered RTAs with GATT and later with WTO started to increase very fast in comparison to the entire period after the WW II. In May 2018 all WTO registered active RTAs reached the number of 287. The number of active RTA evidently exceeds the number of all world’s states. The number of 287 active RTAs suggests that at least some states participate in more than one form of RTA. Such fact further strongly suggests that at least before 2017 there was globally developed an intensive interest among states to join or create one or another form of the RTA. The growth of registered and active RTAs in the last 25 or so years confirms realization of the theoretically predicted positive economic impacts of the RTAs on the member states economic achievements. However Mr. Trump, as the actual President of the USA, started to question expected positive economic gains of the existing RTAs. The policy of unilateral increases of USA’simport tariffs introduced by new USA administration presents open violation of the WTO trading rules. The USA’s discriminatory trade policy has been further extended by the decided that USA has to exit from its existing RTAs. USA’s decision of dismantling of the existing RTAs creates questions about their real economic efficiency and generally about the future of such international trade agreements. The process and actions after the dismantling and renegotiating of the USA’s RTA with Mexico and Canada, known as North American Free Trade Agreement (NAFTA, established Jan.1, 1994) produce some insight into the weaknesses and into the potential changes of the future RTAs. In the paper we analyse expected economic gains and eventual disadvantages of the RTAs for the member states. The expected end of NAFTA and creation of a new trade agreement between USA, Mexico and Canada are analysed with the purpose to develop insights into the probable future existence and reforms of the RTAs in the global economy.