It is also important to note that a free trade agreement is a reciprocal agreement that is authorized by Article XXIV of the GATT. Autonomous trade agreements for developing and least developed countries are permitted by the 1979 decision by the signatories of the General Agreement on Tariffs and Trade (GATT) (“empowerment clause”) on differentiated and more favourable treatment, reciprocity and increased participation of developing countries. It forms the legal basis for the WTO`s Generalized Preference System (GSP).  Free trade agreements and preferential trade agreements (as mentioned by the WTO) are considered an exception to the MFN principle.  In this round of conferences, leading economists and trade policy makers discuss U.S. initiatives to launch free trade negotiations with a wide range of countries in the Asia-Pacific region, the Western Hemisphere and Africa. The number of such initiatives is unprecedented and has raised important political questions regarding U.S. interests in the negotiations, prioritization among the many candidates for free trade agreements (FTAs) with the United States, the objectives of these trading partners and the impact these agreements could have on broader initiatives such as the Doha Round within the World Trade Organization and the U.S. Free Trade Area. The Band documents were presented at a conference on U.S. free trade agreements and trade policy, sponsored by the Institute in May 2003.
The publisher, Jeffrey Schott, summarizes the political implications of conferences and discussions that revolve around several themes: the conceptual case of free trade agreements and how they have worked in the past; what free trade agreements mean for the world`s largest system; specific agreements already under way (Australia, Central America, Morocco, Southern Africa) or envisaged (ASEAN, Brazil, Egypt, Korea and Taiwan). The band contains a technical appendix containing GTAP results and simulations of business effects and well-being models of forward-looking agreements. The EU has trade agreements with these countries/regions, but both sides are now negotiating an update. The European Commission reports annually on the implementation of its main trade agreements in the previous calendar year. Free trade agreements, which are free trade zones, are generally outside the scope of the multilateral trading system. However, WTO members must inform the secretariat when new free trade agreements are concluded and, in principle, the texts of free trade agreements are reviewed by the Committee on Regional Trade Agreements.  Although a dispute in free trade areas is not the subject of litigation within the WTO`s dispute resolution body, “there is no assurance that WTO panels will comply and reject jurisdiction in a particular case.”  First, tariffs and other rules applicable to trade with non-parties to this free trade area in each of the parties that signed a free trade area in force at the time of the creation of this free trade area must not be higher or more restrictive than tariffs and other rules applicable in the same signatory countries prior to the creation of the free trade area.