Preferential Trade Area

Prerequisites

Trade Bloc Show

Free Trade Area Show

Preferential Trade Area

Introduction

  • A preferential trade area (PTA) is a type of trade bloc in which tariffs have been reduced, but not completely removed, between members.
  • It is often the precursor to a free trade agreement (FTA), and the goal of a PTA is to form an FTA.
  • There are two types of agreement:
    • An agreement between two countries is called a bi-lateral agreement.
    • An agreement between 3 or more countries is called a multi-lateral agreement.