Preferential trading area

A Preferential trade area (also Preferential trade agreement, PTA) is a trading bloc which gives preferential access to certain products from the participating countries. This is done by reducing tariffs, but not by abolishing them completely. A PTA can be established through a trade pact. It is the first stage of economic integration. The line between a PTA and a Free trade area (FTA) may be blurred, as almost any PTA has a main goal of becoming a FTA in accordance with the General Agreement on Tariffs and Trade.

These tariff preferences have created numerous departures from the normal trade relations principal, namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members.^[1]

Examples:

• the European Union and the ACP countries, formerly via the trade aspects of the Cotonou Agreement, later via Economic Partnership Agreements (EPA) or Everything But Arms (EBA) agreements
• the Europe Agreements
• European Economic Area
• India and Afghanistan
• India and Mauritius
• the North American Free Trade Agreement (NAFTA)
• the Generalized System of Preferences

References

1. ^ CRS Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition - Order Code 97-905

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