Trade Agreements and Tariff Preference Programs

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Running Head: Trade Agreements and Tariff Preference Programs

Trade Agreements and Tariff Preference Programs
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Introduction
Most countries in the world adopt Trade Agreements and Tariff preference programs in order to make trade between countries easy and to reduce various barriers to trade that are often present in most inter-country trading activities. The United States is currently party to numerous of these trade agreements and tariff Preference programs. This paper compares and contrasts three of these trade Agreements and Tariff Preference Programs, in specific NAFTA, CAFTA and GSP will be analyzed.
Analysis
Contrasts
Key points of contrast NAFTA CAFTA GSP
Party countries to agreement The trade agreement is a multilateral trade agreement between the Northern American countries, that is, United States, Canada, and Mexico (Office of the United States Trade Representative, 2011a). CAFTA is a free trade agreement between the United States and its neighbors in the western hemisphere. The bilateral trade agreement is between the US and its neighbors, that is, Costa Rica, The Dominican Republic, El Salvador, Nicaragua, Honduras, and Guatemala (CAFTA intelligence Center, 2011). GSP is a formal exemption program from WTO's MFN principle designed to promote economic growth in the developing countries by providing preferential duty free entry of products from these countries. The program benefits 4800 products from 129 designated developing countries (Office of the United States Trade Representative, 2011b).
Implementation and expiration dates NAFTA was implemented on January 1st, 1994, but has no expiration date (CBP.gov, 2010). CAFTA-DR between US and El Salvador was implemented on January 3rd, 2006, while that between US, Nicaragua and Honduras were implemented on the same day that is January 4th, 2006. CAFTA between US and Guatemala was implemented on January 7th, 2006, while that between US and Dominican Republic was implemented on January 3rd, 2007. That between US and Costa Rica was implemented on January 1st, 2009. All these bilateral trade agreements between the US and the neighbor countries have no expiration dates (CBP.gov, 2010) The GSP preferential legislation was implemented on January 1st, 1976, by the Trade Act of 1974. the GSP program authorization expired on December 31st,2010, and as of march 2011, congress had not reauthorized the program (Office of the United States Trade Representative , 2011b)
Methods for dispute resolution Based on the two sides of the agreement on environment and labor, NAFTA has a wide variety of dispute settlement schemes and dispute avoidance and management schemes as pointed out in chapter 19, 20, 11 and articles 14-15. Dispute resolutions start with consultations and moves to formal panels if necessary. The main resolution mechanism includes provisions for panels to settle disputes, the codes of conduct for dispute settlement, and rules of procedure for panels. NAFTA secretariat is responsible for administering dispute settlements procedures (Vega, 2003; Duke Law, 2011). CAFTA resolves disputes in two categories; between states and those between natural and juridical persons. In state to state, both concerned countries agree on the procedural stages for setting up of resolution panels, while person to person, the areas of agreement will be interpreted before internal judicial and administrative entities taking into account the rights of the persons. Consultative committees are also very important in resolving private commercial disputes (Girvan, 2003). the dispute resolution provisions as stipulated in chapter 10 and 20, also provides methods such as mediation and arbitration (Hamilton & Fernandez-Fonseca, 2007) The Dispute Settlement Understanding (DSU) gives provisions that seek to address disputes concerning the marginalization of developing countries as provided in the GATT dispute settlement provision. Article 8 (2) and 8 (10) of DSU provides provisions for composition and of dispute resolution panels (WTO, 2001; World Trade Organization, 2009). Under resolution 21 of US GSP Disputes can be resolve through panels, litigation, arbitration and mediation (US Trade Act, 1974).
Intellectual property provisions NAFTA was the first trade agreement that included provisions with obligations of protecting intellectual property rights. Chapter 17 of NAFTA sets out the provisions for IP rights, their scope to cover trademark and patent rights, copyrights, trade secret rights, plant breeders' rights, rights in layout and design of semiconductor integrated circuits, and industrial design rights (Terry, Ederer & Orange, 2005). These provisions create the highest legal standard for protection and enforcement of IP rights ever negotiated between trading countries (Smallson, 1994). CAFTA has provisions for intellectual property rights protection for protection of copyrights, patents, and trademarks. It also has other restricting provisions such as the five year market exclusivity period for manufacturers and the patent extension provisions. The CAFTA IP laws are more stringent than domestic laws found in the CAFTA / DR countries and even more stringent than WTO standards and the Doha declaration (Metzler, 2005). This has resulted in controversies over various provisions of the CAFTA IP provisions ...