Over the last four decades, the formation and functions of the Regional Trade Agreements, Preferential Trade Agreements and Customs Union has become one of the most prominent and acrimonious issues on the world trade agenda especially when the scope of it is being broadened with the inclusion of areas viz., investment policy, competition policy, intellectual property and environmental standards etc. A number of rationales are still often invoked for treating the Regional Trade Agreements as a special case.

These rationales include:

1. They create a wider trading area;
2. they make possible a more economic allocation of resources; and
3. they increase production and raise planes of living.

The Importance of such agreements has arisen from a number of socioeconomic, political and security considerations. RTAs have proved to encourage investment, facilitate preferential access to larger competitive markets and accelerate economic growth. It is important to ensure that regional trade agreements become building blocks to world trade and not stumbling blocks to achieving the universal goal of global amalgamation.

RTAs are increasingly being viewed as a link between developing and developed countries towards the common goal of economic development and a gateway to global trade. Slow progress on the recent WTO based multilateral trade talks and the gradual erosion of faith in multilateralism has also given a new thrust to the concept of regionalism as a highly effective tool for expanding international trade, economic cooperation and global integration. As regionalism becomes a more widely accepted and an indispensable aspect of international trade, a sustained commitment to multilateralism can help to arrest the possible divisiveness of regionalism and tap its potential for attaining greater global economic integration and rapid trade reforms.

Types of Regional Trade Agreements:

Most RTAs are meant not merely to slash tariffs but also to reduce impediments in international trade and to promote trade by reducing either tariff or non-tariff measures. They also essentially include rules and regulations that improve the overall investment climate. RTAs range across different levels of economic integration and differ significantly in their scope and coverage. The term regional trade agreement encompasses both reciprocal bilateral free trade and customs areas as also multi-country (pluri-lateral) agreements.

RTAs are commonly classified into the following categories:

1. Preferential Trade Agreements (PTA):
   Preferential trade agreement is a trading agreement giving preferential access to certain products from certain countries. This involves reducing tariffs but not their elimination. This is the weakest form of economic integration. The South Asian Preferential Trade Arrangement (SAPTA) between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka was one such agreement.
    
2. Free Trade Agreement (FTA):
   A free trade agreement is the most widespread form of RTAs. In an FTA, member countries eliminate or reduce internal tariff and nontariff trade barriers (to trade in goods, and also increasingly in services) among members, while each member is free to maintain different most-favoured-nation[2] (MFN) barriers on non-members. Member countries are required to develop rules-of-origin criteria to prevent imports from third countries to be trans-shipped through the member country with the lowest tariffs. The best known free trade agreements are the European Free Trade Association (EFTA), the North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA).
    
3. Customs Union (CU):
   The next level of integration is a Customs Union (CU). A CU moves beyond an FTA by establishing a common external tariff (CET) on imports from non-member countries. Typically, customs unions contain mechanisms to redistribute tariff revenues among member countries. Some examples of Customs Unions include South African Customs Union (SACU), East African Community Customs Union (EAC), Gulf Cooperation Council (GCC), and Central American Customs Union (CACU).
    
4. Common Market:
   Common Markets are a form of ‘deep integration', where member countries attempt to harmonise institutional arrangements and laws and regulations among themselves. While all the features of a customs union are present under a common market system, the latter also provides for free movement of factors of production (labour and capital) among the member countries, in addition to the free flow of products (output). The Southern Cone Common Market (MERCOSUR) and the Common Market of Eastern and Southern Africa (COMESA) are examples of well-known common markets. Other prevailing Common Markets include Caribbean Community and Common Market (CARICOM), and the Central American Common Market (CACM).
    
5. Economic and Monetary Union:
   The most comprehensive RTA is an Economic and Monetary Union, in which members remove all internal trade barriers, permit the free movement of capital and labour, erect common external trade barriers, and unify their fiscal and monetary policies. Here, member countries share a common currency and macroeconomic policies. The best known and most successful form of a Regional Trade Agreement in the world, in the form of an Economic and Monetary Union is the European Union. Other Economic and Monetary Unions include the West African Economic and Monetary Union (WAEMU), Economic and Monetary Community of Central Africa (CEMAC), Eurasian Economic Community (EEC) and the Economic Cooperation Organization (ECO).

In addition, there are also some Partial Scope Agreements among developing countries that are designed to have limited product coverage. Countries wanting to join the WTO have to negotiate bilateral agreements known as accession agreements with major economic powers, as a part of their entry procedure, which includes specific commitments, concessions and schedules to liberalise trade in goods and services.

According to latest updates from WTO, as on July31, 2013 as many as 575 RTAs have been notified to WTO and 379 are in force. These RTAs broadly include free trade agreements, customs unions, preferential arrangements, services agreements, and accession agreements. Of the 379 RTAs notified to WTO[3] and which are in force, 248 are FTAs, accounting for 65 per cent of the total; 96 are Economic Integration Agreements (EIA)[4], 12 are Customs Unions (CU), 12 are Partial Scope (PS) Agreements, while 11 are Accession Agreements (either to FTAs, customs unions or economic integration agreements. Of these 379 RTAs, 236 RTAs were notified under Article XXIV of the GATT 1947 or GATT 1994; 31 under the Enabling Clause; and 112 under Article V of the GATS.[5]

As can be seen from above information's, FTAs constitute the largest proportions and they dominate all other types of the RTAs notified and in force. The predominance of FTAs is probably due to the fact that they are faster to conclude and require a lower degree of policy coordination among the contracting parties, as in an FTA the member countries maintain their own trade policy visà- vis a third (non-member) country.

Further, FTAs are generally concerned with strategic market access, and are often not bound by any geographical considerations. In contrast, in a customs union, members have to maintain a common external tariff (CET), which requires coordination and harmonisation of external trade policies amongst the member countries, and geographical considerations often play an important role in determining the objectives of such integration.

Factors Responsible for Rapid Increase of Regional Trade Agreements:

Regionalism is a strategy to achieve comprehensive reforms with key trade partners. In the past, countries have sought to implement deep economic and institutional integration by crafting agreements that address more than tariff reform. Many RTAs now deal with the reform or harmonisation of regulatory practices, investment protection, labor issues, trade dispute resolution, and the development of common positions in other trade negotiation venues. Increasingly, RTAs are also viewed as a way to link developing and developed countries in a common project of economic development. RTAs can also encourage investment, facilitate productivity gains in participating developing countries and accelerate their economic growth.[6]

A classic example of deep economic integration among nations through an RTA is the European Union. In the EU all internal trade barriers have been eliminated and a common external tariff is exercised on all non-members. All EU members also share a common currency and a set of macroeconomic policies. Free trade blocs formed by agreements such as the EFTA, SAFTA, ASEAN-FTA and NAFTA, and customs unions such as the EU, SACU etc. have allowed countries to lower trade barriers among members and political allies and to develop their own trade policies.

Many developed countries offer nonreciprocal preferences as another way to foster exports by developing countries. Nonreciprocal preferences are arrangements between developed and developing countries that reduce tariffs or even allow duty-free access for selected products from developing countries. However, these arrangements often exclude products that are of the greatest importance to developing countries.[7]

RTAs are primarily common among, but not restricted to, small groups of neighbouring countries sharing similar concerns as negotiations can be reached much faster when compared to a multilateral structure. The ASEAN-FTA, NAFTA, South Asian Preferential Trade Arrangement (SAPTA) between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, are such examples of RTAs among neighbouring countries.[8]

There are various factors that lead to rapid expansion of FTAs around the world which include:

• to derive benefits of increased preferential access to highly competitive larger markets
• slow progress in trade liberalisation under the WTO
• a sharp increase in FTAs around the world which has prompted other countries not involved in regional trade agreements to also consider engagement in suchagreements.
• to promote liberalization and bring about policy reforms, and
• to attract more foreign direct investment into the country. There are several factors that are common to many countries, while there are some specific factors that may explain the motive of engagement in FTAs in case of some individual countries.[9]

Rapid expansion of FTAs in other parts of the world has prompted East Asian economies to form FTAs, in order to maintain and expand market access for their exports. By the mid-1990s the world's leading economies except those in East Asia had become members of FTAs. The world's two largest economic regions, North America and Western Europe too formed separate FTAs. Faced with these situations, many countries and specifically East Asian economies became concerned about their export markets.[10]

The formation of the North American Free Trade Agreement (NAFTA) had significant impact on East Asian countries for several reasons. One is the change in US policy to regard FTA as an important trade policy signaling the increasing importance of regionalism. The negative impacts of the NAFTA on East Asian countries in the form of a decline in exports to the US and a decline in FDI from not only the US but other countries highlighted the importance of FTAs to deal with these negative impacts.[11]

The time consuming and slow progress on multilateral trade liberalisation under the WTO was also one important factor that led to the proliferation of FTAs in different parts of the world. Many countries, including those in East Asia realized the benefits of trade liberalisation for the promotion of economic growth. Faced with the difficulty in pursuing trade liberalisation on the global scale, many countries have opted to form FTAs with like-minded countries to pursue trade liberalisation.

The East Asian economies are also trying to use FTAs as means to promote deregulation and structural reforms in the domestic market and to promote socio-economic cooperation in the region, as these measures contributed to rapid economic growth during the '90s when these economies faced a severe financial crisis.[12] Many East Asian economies also see FTAs as an effective means to promote economic and other types of cooperation in East Asia having understood the importance of regional cooperation after the financial crisis of 1990 and to avoid its occurrence in future.

The need to attract foreign investment (and stimulate domestic investment) is increasingly being cited as an impetus for RTAs by many researchers. Participation in regional agreements by developing countries also demonstrates that the country is committed to opening its markets. Moreover, political factors too have contributed to the increased interest in FTAs in different regions of the world. Political considerations for such emergence of regional/bilateral agreements inevitably include consolidation of peace and increasing regional security. Furthermore, there are political economic reasons because of which governments may find it easier to liberalise when other countries are doing the same.[13]

Another way in which an FTA could contribute to the welfare of its members is by providing insurance against possible future events to at least one of the members. The desire to increase bargaining power with respect to third parties is also often cited as a reason why countries may wish to join a RTA.

Regionalism, regionalisation, regional economic integration, regional economic cooperation, regional trade agreements, free trade agreements ..., these and other similar terms appear frequently on newspapers, academic articles, and official documents when international trade, investment, or finance is concerned. In essence, they all refer to one phenomenon: the cross-border preferential economic initiatives undertaken by national governments or private sectors at the regional or bilateral level, as opposed to multilateral initiatives which are conducted on the basis of non-discrimination under the auspice of the World Trade Organisation (WTO).

The formation of regional trade agreements has been legalized and governed by Article XXIV[14] of GATT 1947 as well as in Article V of the GATS.[15]India was an active member of the GATT and until the beginning of this millennium believed that multilateral process at the WTO along with unilateral trade liberalization were the only two means of international trade liberalization.[16] India's approach to regional trade agreements was quite reserved till the late 1990s, when trade was closely regulated by a regime of import licences, high tariffs, and the prevalence of quantitative restrictions.

With foreign exchange posing a major constraint, any decision to arrive at a preferential trade agreement had to have a strong political or the compelling rationale. But with the economy becoming more open and showing rapid growth, India's approach to regional trade agreements has also seen an evolution.

In tandem with the high domestic economic growth, India has shown greater openness in recent years towards negotiating[17] free trade or other preferential trading agreements either bilaterally on in a regional framework. With the economy performing well and industry showing greater competitiveness, India is feeling more confident in exploring this parallel track of trade liberalization with select partners. This is also in keeping with the worldwide trend which is seeing a sharp surge in such agreements with even a country like Japan that has desisted from such an approach cutting number of bilateral deals.

However, the signing of these regional trade agreements is not rooted in any comprehensive trade policy encompassing the world trade and the regional trade agreements are impending domestic policy reforms. There are several areas in which standards of negotiations are still evolving to bring about a greater extent of clarity in concepts, improved objectivity in terms of their impacts and better-understood implementation of the implications.

The negotiating processes of regional trade agreements appear to be complicated and the pace of implementation of India's Regional Trade Agreements has chronically lagged behind the speed with which the regional trade agreements have been entered into, creating an implementation deficit. And also, the most of India's Regional Trade Agreements contain some provision that may not be consistent with the relevant WTO rules. This combined with an implementation deficit of the regional trade agreements has created a scenario where, in their current form, India's Regional Trade Agreements, while not supporting the multilateral process at the WTO, have also not provided any real alternative gains.

Regionalism, regionalisation, regional economic integration, regional economic cooperation, regional trade agreements, free trade agreements ..., these and other similar terms appear frequently on newsstudys, academic articles, and official documents when international trade, investment, or finance is concerned. In essence, they all refer to one phenomenon: the cross-border preferential economic initiatives undertaken by national governments or private sectors at the regional or bilateral level, as opposed to multilateral initiatives which are conducted on the basis of non-discrimination under the auspice of the World Trade Organisation (WTO).[18]

Although these terms can be understood loosely and used interchangeably, it is important and useful to distinguish one term from another conceptually. Winters, when discussing the regionalism versus multilateralism debate, defines regionalism loosely as any policy designed to reduce trade barriers between a subset of countries regardless of whether those countries are actually contiguous or even close to each other.[19]

According to Lamberte, regionalism refers to formal economic cooperation and economic arrangements of a group of countries aimed at facilitating or enhancing regional integration.[20] Regionalism is to be distinguished from regionalisation, which is:
market-driven integration, spurred by unilateral reforms in individual economies within a particular region.[21]

Literally, regionalisation also refers to the actions of building regionalism through public and/or official efforts. According to the Dictionary of Trade Policy sponsored by the WTO, regionalism is described as actions by governments to liberalise or facilitate trade on regional basis, sometimes through free-trade areas or customs unions.[22] Following these inspirations, economic regionalism can be roughly understood as:

1. formal economic cooperative measures
2. undertaken by governments
3. to facilitate regional economic integration
4. which however is not necessarily confined to a geographical region.

Put differently, regionalism can now be broadly characterised as the tendency towards the creation of preferential trade arrangements between a number of countries located in the same or even different regions, which discriminate against third countries.This naturally leads to the definition of economic integration.

Bela Balassa, in his seminal work The Theory of Economic Integration, defines economic integration as a process and a state of affairs:

Regarded as a process, it encompasses measures designed to abolish discrimination between economic units belonging to different national states; viewed as a state of affairs, it can be represented by the absence of various forms of discrimination between national economies.[23] Balassa further explains the different forms of integration: Economic integration ... can take several forms that represent varying degrees of integration. There are free-trade area, a customs union, a common market, an economic union, and complete economic integration. [24]

In a free-trade area, tariffs (and quantitative restrictions) between the participating countries are abolished, but each country retains its own tariff against nonmembers. Establishing a custom union involves, besides the suppression of discrimination in the field of commodity movements within the union, the equalization of tariffs in trade with nonmember countries.[25] A higher form of economic integration is attained in a common market, where not only trade restrictions but also restrictions on factor movements are abolished.

An economic union, as distinct from a common market, combines the suppression of restrictions on commodity and factor movements with some degree of harmonization of national economic policies, in order to remove discrimination that was due to disparities in these policies. Finally, total economic integration presupposes the unification of monetary, fiscal, social, and countercyclical policies and requires the setting-up of a supra-national authority whose decisions are binding for the member states.[26]

Since its introduction, the Balassa-stages approach has been indispensable for an understanding of both the literature and practice of economic integration. The usage of this approach is widespread and the terms contained therein for describing the different degrees of integration, especially the free-trade area and customs union, have hence come into fairly standard usage.[27] It is nonetheless important to note that, in light of the later theoretical and practical development of regionalism, the Balassa-stages approach should be amended and clarified in order to provide a more precise analytical framework for economic integration.

For example, it should be understood that the Balassa-stages are presented sequentially for the purpose of analysis, and hence the sequence is not to be followed rigidly.[28] Economic integration in Europe, for instance, started directly with a customs union instead of a freetrade area. Balassa's distinction between a common market and an economic union also presents a conceptual problem.

The European Union's experience shows that integration beyond the formation of a custom union is difficult to define and conceptualise, and in this sense Balassa's third and fourth stages (common market and economic union) should be taken together.[29] Furthermore, it is probably not necessary--or useful--to define the final stage as total economic integration with a supra-national authority. It is more realistic to envisage several partial ‘unions' beyond the economic union, such as a tax union, a social union, a monetary union and a political union. Whether these sub-unions will work together toward the formation of a unitary state, as Balassa's final stage implies, is currently beyond the theoretical studies as well as the practice of economic integration.[30]

In both the literature and legal instruments of economic integration, the term single market is becoming increasingly popular. The Single European Act of 1987 formally created a Single Market in Europe that came into operation on 1 July 1987. In the 2003 Declaration of Association of Southeast Asian Nations (ASEAN) Concord II (Bali Concord II), the heads of ASEAN countries adopted the goal that the ASEAN Economic Community shall establish ASEAN as a single market and production base.

Apparently, a single market is more than a common market, but how much more is an interesting question. The Single European Act describes it as an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. Criticising the imprecision of this definition, Lloyd defines a single market as one in which the Law of One Price must hold in all goods, services and factor markets, which means that there should be a single price in the regionwide market for every tradable commodity and factor, expressing all prices in a common currency and adjusting for the real costs of moving goods or factors between locations.[31]

In essence, a single market requires not only the elimination of border measures and full national treatment of beyond-the-border measures applying to imports, but also harmonisation of rules and procedures across participating states. Hence, a single market is synonymous with complete economic integration of the area.[32] However, without becoming a unitary state, how complete the market can be remains a question beyond the scope of this study. Regionalism, as noted above, can be a cross-region phenomenon.

For analytical purposes, it is useful to define regional economic integration as a dynamic process encompassing the integration of economies within a geographic region. Hence in this study, regional economic integration in South Asia, South Asian regionalism orother similar terms, are all used to refer to the integration activities in the particular South Asian region concerned.

Economic integration is conducted through trade agreements. It is important to define the concepts of regional trade agreements (RTAs) and free trade agreements (FTAs) which are to be used frequently in this study. Following the usage of the WTO, this study does not distinguish between regional trade agreements or free trade agreements, as, [i]n the WTO context ... RTAs may be agreements concluded between countries not necessarily belonging to the same geographical region.[33]

There is also no distinction made between bilateral trade agreements concluded between two parties and those agreements between more than two parties. They are instead all referred to as regional trade agreements or free trade agreements, with the two terms used interchangeably in this study.[34] However, to the extent that RTAs also cover agreements between countries in different regions, the term South Asian RTAs is used to refer to those arrangements between countries in South Asia.

Economic integration may be conducted through different approaches, each of which however also represents a different degree of integration. Three approaches may be distinguished in this regard.[35] First, there is sectoral integration, which is used to mean integration which is:

1. limited to particular industries or sectors of the economy or economies concerned;
2. gradual, proceeding successively from sector to sector.

Second, functional integration refers to integration which is:

1. gradual, proceeding successively from sector to sector;
2. by means of price incentives operating in a free market.

In its first aspect, functional integration is identical to the second sense of sectoral integration. However, the latter is more inclined to be used as distinct from general across-the-board integration. The last one is institutional integration, used to mean integration which is by means of adaptations of national or international institutions (in the widest sense of the word, for example, monetary practices and arrangements). In the regionalism literature, the second sense of institutional has been more customary.

Sectoral and/or functional integration is often characterised as market-driven integration whilst institutional integration is known as policy-driven. It has been observed that regional economic integration in Europe under the auspice of the European Union (EU) corresponds more to the policy-driven model of institutional integration as, in Europe, the origins of integration have been institutional in nature, and the development of institutions has been prominent throughout the process.[36]

In contrast, integration in East Asia has been market-driven. Although the existing institutions in this region are fairly weak and ineffective, intra-industry trade in parts and components and foreign direct investment--conducted by corporations and encouraged by significant liberalisation--have been and continue to be the key driving forces of the established production-sharing system, of the evolution of these cross-border networks and of the fostering of regional cooperation and integration. As will be discussed below, China is a major player in this production-sharing regime and plays a key role in shaping the market-driven integration in Asia.

It is, however, over-simplistic to characterise any of the two integration model as entirely market-driven or policy-driven. The role of market forces in European integration should never be underestimated. For instance, in the sense that the extent of regionalisation is commonly measured by the share of intra-regional trade in total trade, intra-regional trade in Western Europe (EU-15) had amounted to over 50 percent long of total volume of trade before the Single Market was formed in 1992. On the other hand, national governments in Asia, through inter-governmental cooperation, have been playing a significant role in the integration process, albeit Asian supranational institutions have not yet developed.

Lastly, it is fundamentally important to stress that, although regional integration requires the existence of substantial political will to cooperate, it does not necessarily include the political commitment to political integration or political union. In other words, aspirations for political union are not a necessary precondition for building regional institutions that foster economic integration.[37] This is of course the experience of Europe, but it would be highly relevant in the Asian context as political integration in Asia is almost unattainable in the foreseeable future.

According to the WTO, regional trade agreements (RTAs) may be agreements concluded between countries not necessarily belonging to the same geographical region, but also has a more specific meaning because of the WTO provisions which relate specifically to conditions of preferential trade liberalisation with RTAs. A regional trade agreement is an economic trade agreement to reduce tariffs and non-tariff barriers on trade between two or more nations to promote trade and investment.[38] Bilateral and multilateral trade agreements could be mutually beneficial to both the countries.

The need for regional trade agreements has arisen from a number of socio-economic, political and security considerations. Political origin of RTAs is rooted in foreign policy, commercial diplomacy, and development policy interests.[39] Issues that fail to be resolved at the multilateral level such as trade in services, investment, competition, environment and labour standards can be effectively considered bilaterally or through preferential liberalization[40] by entering into regional trade agreements.

Following the suspension of the Doha round of discussions of the WTO, and consequent gradual loss of confidence in WTO-bound multilateralism, countries which are keen on expanding their international trade at a fast rate are increasingly considering liberalisation at the bilateral and regional levels as their preferred means to a more flexible trade and investment regime. Even countries like the US and India, who have been major proponents of the multilateral system, are now opting for regional dialogues.

Regional trade agreements continue to proliferate as progress on the multilateral trade talks such as Doha round has slowed. There has been a rapid growth in the number of regional trade agreements (RTAs) in recent years. More than 500 RTAs are in force at present,[41] and the number is rapidly growing. The collapse of the Cancun Ministerial Conference of the WTO in 2003 and the Hong Kong Ministerial Conference in 2005 has underscored the difficulties inherent in multilateral agreements and has resulted in many countries opting for RTAs as the primary means of enhancing international trade.

Conclusion
The potential political and economic gains for India in following the dual route of multilateralism and regionalism are substantial, in their current form, India's Regional Trade Agreements face two primary challenges. First, most of India's Regional Trade Agreements, whether in goods or services, may not be fully consistent with the applicable rules of the WTO. Second, the implementation and administration by India of its regional trade agreements is weak, greatly reducing the actual benefits that flow from these regional trade agreements.

However, the signing of these regional trade agreements is not rooted in any comprehensive trade policy encompassing the world trade and the regional trade agreements are impending domestic policy reforms. There are several areas in which standards of negotiations are still evolving to bring about a greater extent of clarity in concepts, improved objectivity in terms of their impacts and better-understood implementation of the implications.

The negotiating processes of regional trade agreements appear to be complicated and the pace of implementation of India's Regional Trade Agreements has chronically lagged behind the speed with which the regional trade agreements have been entered into, creating an implementation deficit. And also, the most of India's Regional Trade Agreements contain some provision that may not be consistent with the relevant WTO rules.

This combined with an implementation deficit of the regional trade agreements has created a scenario where, in their current form, India's Regional Trade Agreements, while not supporting the multilateral process at the WTO, have also not provided any real alternative gains.

End-Notes:

1. *
2. This principle of Most-Favoured-Nation Treatment is found in all the three main WTO Agreements. Those are Article 1 of the General Agreement on Tariff and Trade, 1994; Article 2 of the General Agreement on Trade in Services, 1994; Article 4 of the Agreement on Trade-related Aspects of the Intellectual Property Rights, 1994.
3. Regional Trade Agreements notified to the GATT/WTO and in Force as of July 31, 2013, available at: http://www.wto.org/english/tratop_e/region_e/region_e.htm
4. The term economic integration agreement has been used in the WTO Agreement on Trade in Services (GATS) (Article V) in relation to agreements that cover trade in services.
5. Supra note 7.
6. C. Randall Henning, Regional Economic Integration and Institution Building in Julie McKay, Maria OlivaArmengol& Georges Pineau, at 79.
7. John Whalley, Why the Countries Seeks Regional Trade Agreements, available at: www.nber.org/papers/w5552
8. Srinivasan, T. N., and G. Canonero, Liberalization of Trade among Neighbours: Two Illustrative Models and Simulations. South Asia Discussion Paper Series, Supplement II to IDP No. 142, World Bank, Washington, D.C. 1993.
9. Mehta, Rajesh and Narayanan S., India's Regional Trading Arrangements, 114 RIS Discussion Paper 2006.
10. Ibid.
11. Blecker, Robert The North American Economies after NAFTA: A Critical Appraisal 33(3) International Journal of Political Economy 5-27 (2003).
12. Amar Nath Ram, Two Decades of India's Look East Policy: Partnership for Peace, Progress and Prosperity? 17 (Indian Council of World Affairs (ICWS), New Delhi, 2012).
13. See Jaime de Melo, Regionalism and Developing Countries: A Primer, 41 Journal of World Trade 2 (2007).
14. Article XXIV of the GATT mentions three types of Regional Trade Agreements: (i) Free Trade Agreements;(ii) Customs Unions; and (iii) Interim Agreements that lead to the formation of Free Trade Agreements or Customs Union.
15. These provisions are an exception to an elementary and cardinal Most-Favoured-Nation Principle i.e., that trade must be conducted on a non-discriminatory basis.
16. Ever since 1991 a substantial portion of India's trade liberalization has been carried out by unilateral reduction of tariff rates, which have been announced in subsequent annual budgets.
17. India has entered into numerous regional trade agreements with other countries, while many other such agreements are in the pipeline. All of these are either free trade agreements or developing country regional trade agreements and none of them are Customs Union.
18. Alan Winters, Regionalism versus Multilateralism World Bank Policy Research Working Study 1687 (The World Bank, Washington D.C., 1996).
19. Ibid.
20. Mario B. Lamberte, An Overview of Economic Cooperation and Integration in Asia in Asian Development Bank (ADB), Asian Economic Cooperation and Integration: Progress, Prospects, and Challenges 234 (ADB, Manila, 2005).
21. Ibid.
22. WTO Secretariat, Scope of RTAs, available at: http:// www.wto.org/english/tratop_e/region_e/scope_rta_e.htm.
23. Bela Balassa, The Theory of Economic Integration 04 (Richard D. Irwin Inc., Illinois, 1961).
24. Ibid
25. Paul Krugman, Regionalism vs. Multilateralism: Analytical Notes, in New Dimensions in Regional Integration, Center for Economic Policy Research Journal 74-75 (2011).
26. Ibid.
27. Raj Bhala & Kevin Kennedy, The GATT-WTO System, Regional Arrangements, and U.S. Law, 162 Journal of World Trade Law 1998.
28. Jacques Pelkmans, European Integration: Methods and Economic Analysis 24 (Financial Times Prentice Hall, London, 2nd ed., 2001).
29. Ibid.
30. JoostPauwelyn, The Puzzle of WTO Safeguards and Regional Trade Agreements, 7 J. Int'l Econ. L. 109-127 (2004).
31. Peter Lloyd, What is a Single Market? An Application to the Case of ASEAN, 22 (3) ASEAN Economic Bulletin 251 (2005).
32. Peter Lloyd & Penny Smith, Global Economic Challenges to ASEAN Integration and Competitiveness: A Prospective Look REPSF Project 03/006a, at 11, available at: http://www.aadcp-repsf.org/docs/03-006a-FinalReport.pdf.
33. Ibid.
34. Jagdish Bhagwati has suggested the use of the term preferential trade agreements instead of free trade agreements and custom unions because the latter two phrases can mislead the public to equate them with non-preferential free trade. See Jagdish Bhagwati, Pravin Krishna &ArvindPanagariya, (eds.), Trading Blocs: Alternative Approaches to Analying Preferential Trade Agreements33 (The MIT Press, Massachusetts, 1999).
35. F. Machlup, Economic Integration in Miroslav N. Jovanovic, ed., International Economic Integration: Critical Perspectives on the World Economy, Volume I: Theory and Measurement (London and New York: Routledge, 1998) at 142.
36. EisukeSakakibara& Sharon Yamakawa, Market-driven Regional Integration in East Asia in Julie McKay, Maria OlivaArmengol& Georges Pineau, eds., Regional Economic Integration in a Global Framework 35-78 (Proceedings of the G20 Workshop, 22-23 September 2004, Beijing, China) (Frankfurt: European Central Bank, 2005) at 35.
37. C. Randall Henning, Regional Economic Integration and Institution Building in Julie McKay, Maria OlivaArmengol& Georges Pineau, at 79.
38. Jo-Ann Crawford and Roberto V Fiorentino, The Changing Landscape of Regional Trade Agreements, available at: www.wto.org/English/res.e/booksp_e/discussion_papers8_e.pdf.
39. For an analysis of some of the major reasons why countries enter into Regional trade agreements see John Whalley, Why the Countries Seeks Regional Trade Agreements, available at: www.nber.org/papers/w5552
40. See Petros C. Mavroidis, If I don't do it, somebody else will (or won't): Testing the compliance of Preferential Trade Agreements with multilateral rules, 40 Journal of World Trade 1 (2006).
41. Bartels, Lorand and Ortino, Federico (ed.) Regional Trade Agreements and the WTO Legal System (Oxford University Press, New York, 2006).

Award Winning Article Is Written By: Dr.M Ramesh -  L.L.M., Ph.D. (Law) -The Indian Law Institute, New Delhi) Ph.D. (NALSAR, Hyderabad)

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