The idea of establishing Free Trade Agreements (FTAs) is gaining ground in the recent times especially among the developing countries. Examine what drives such a desire for FTAs among developing countries. (200 words)
Refer – Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 6 years
KEY POINTS
· Under FTA any two or more countries can establish a free trade area where commerce in goods and services can be conducted across their common borders, without tariffs or hindrances.
Driving factors
· FTAs can benefit member countries in various ways, like slowly boosting global free trade by allowing member countries to intensify their level of competition.
· Under FTA, if a country is not yet ready for global competition, it can pick and choose trading partners with which it feels relatively more comfortable.
· This may help raise a country’s confidence and competitiveness, and pave the way for eventual free trade at the global level.
· It provides time to the domestic industry to adjust, and creating an arena to tackle difficult issues like agricultural subsidies and trade in services.
· The circles of trade that are created through FTA can help converge to form expansive multilateral agreements.
· Long-term political and ethnic hostility among various member countries can be minimised to an extent with the signing of FTAs.
· Formation of FTAs can be seen as a strategic move to consolidate peace and increase regional security among member countries.
· Setting up of FTAs can promote the spirit of open regionalism which would be complementary to a non-discriminatory multilateral system, as espoused by the WTO.
· Existing realities – Erratic and inconsistent stand of the US has sent out confusing signals to the world economy and thwarts the very existence of both the WTO and multilateralism.
· Under such uncertainties, many developing countries are left with a limited option of signing regional trade agreements with their emerging and comfortable trade partners.
Vignesh 6 years
IAS Parliament 6 years
Focus more on the driving factors. Use the links just as a reference and try to improvise on your own. Try to be more legible. Keep writing.
Tapasvi 6 years
Kindly review
IAS Parliament 6 years
Require more clarity with ethnic hostilities point. Conclusion part could have been better. Otherwise a decent attempt. Keep writing.
Nandadeep 6 years
Please review. Thanks
IAS Parliament 6 years
Points are good. Shorten the introduction part. Try to conclude in a better way. Keep writing.
