In general, trade diversion means that a free trade agreement would divert trade from more efficient suppliers outside the zone to less efficient suppliers within the territories. Whereas the creation of trade implies the creation of a free trade area that might not otherwise have existed. In any case, the creation of trade will increase a country`s national well-being. [15] When it comes to the third basic requirement, namely that barriers should not increase for third parties, things become more complicated. Given that free trade agreements are much more widespread than customs union unions, it seems that this is not the case. With regard to free trade agreements, there is no need to negotiate a common external tariff and the tariff applicable to non-parties should not change in general. But there are other channels through which discrimination against outsiders under free trade agreements can increase. The first potential problem arises when developing countries apply tariffs below the maximum levels they should not exceed under WTO rules. This gives them the flexibility to erect barriers to third parties, while respecting or maintaining preferential tariffs for free trade partners. Mexico`s trade response to the 1994 peso crisis is a striking example, when it did so in the context of the implementation of NAFTA.

18 Other studies have shown that free trade agreement partners are more likely to use remedial measures against allegedly unfair trade (anti-dumping and countervailing duties) against outsiders than against each other. 19 Report on the Treatment of Medical Devices in Regional Trade Agreements (RTA) The Market Access Card was developed by the International Trade Centre (ITC) to facilitate market access companies, governments and researchers. The database, which is visible through the market access map online tool, contains information on tariff and non-tariff barriers in all active trade agreements that are not limited to those that are officially notified to the WTO. It also documents data on non-preferential trade agreements (for example. B generalized preference regimes). Until 2019, Market Access Map has provided downloadable links to text contracts and their rules of origin. [27] The new version of the Market Access Map, which will be released this year, will provide direct web links to relevant contract sites and connect to other ITC tools, particularly the rules of the original intermediary. It is expected to become a multi-purpose instrument to help companies understand free trade agreements and qualify for the original requirements under these agreements. [28] To search for documents relating to regional trade agreements in the WTO`s online database, follow this link to access the WTO document database and insert the codes in the search engine icon. The net welfare effects of ATRs are only positive if trade between the parties is not primarily distracted by more efficient external producers.

And even if the impact on trade creation is positive for the parties, there will still be negative effects on third-party exporters, who are increasingly exposed to discrimination.