Daily Current affairs
Preferential Trade Agreements (PTAs) or Generalized System of Preferences (GSP) is a special status given in trade by various countries. In the United States, it is designed to promote economic growth in the developing country, the agreement provides duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories. GSP was instituted on January 1, 1976, by the Trade Act of 1974, mentioned US government. India government, however, thinks the plan has been proliferating since the establishment of the World Trade Organisation (WTO) in 1994.
List of India's trade agreements
1. Partial Scope Agreement (PSA) : A PSA allows countries to trade in a small number of goods, making the scope minimal.
2. Free Trade Agreement (FTA) : A free trade agreement is a preferential arrangement in which members reduce tariffs on trade among themselves while maintaining their own tariff rates for trade with non-members.
3. Customs Union (CU) : A customs union (CU) is a free-trade agreement in which members apply a common external tariff (CET) schedule to imports from nonmembers.
4. Common Market (CM) : A common market is a customs union where movement of factors of production is relatively free amongst member countries.
5. Economic Union (EU) : An economic union is a common market where member countries coordinate macro-economic and exchange rate policies.
India has signed bilateral FTAs with Sri Lanka (1998), Afghanistan (2003), Thailand (2004), Singapore (2005), Bhutan (2006), Nepal (2009), Korea (2009), Malaysia (2011) and Japan (2011).
There have also been two regional trade agreements, the South AsianFree Trade Agreement (SAFTA, 2004) and the India-Association of Southeast Asian Nations Agreement (ASEAN, 2010).
Outside Asia, FTAs have been agreed with Chile (2006) and MERCOSUR (2004).
Trans-Pacific Partnership (TPP), which has been signed but not yet ratified by member countries, and the Trans Atlantic Trade and Investment Partnership (TTIP), which is currently being negotiated.
The TPP comprises twelve member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam, as shown in the map below. The TPP will cover 40 percent of global GDP2 and 33 percent of world trade.
TTIP, when concluded, will be a PTA between the United States and the European Community of 27 member states.