Free Trade Zone Classification

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Free trade zone refers to the trade arrangement designated by the state, more favorable than the relevant provisions of the WTO trade arrangements; in sovereign countries or regions within and outside the customs territory, to draw a specific area, to allow foreign goods exempt from tariffs free access. Free trade area classification can be classified according to nature, can also be classified according to function.

Free trade area classification

First, according to the nature of points
In terms of nature, free trade zones can be divided into: commercial free zones and industrial free zones. The former does not allow the sale of goods unpacking and manufacturing; the latter allows duty-free imports of raw materials, components and accessories, and designated processing area processing and manufacturing.

Second, according to the function points
In terms of function, the function of the World Free Trade Area is determined according to the location conditions and the flow of import and export trade, and adjusts and develops with the development of the domestic and international economic situation. The main types are the following:

(A) re-distribution type
This type of free trade zone utilizes superior physical and geographical environment for re-export and distribution of goods, cargo storage, commercial processing and so on. The most prominent is the Panama Free Trade Zone in Cologne.

(B) trade and industry, trade-based
This type of free trade zone to engage in import and export trade, and engage in some simple processing and assembly manufacturing. The most common in developing countries. Such as the United Arab Emirates Dubai Harbor free port area.

(C) export processing type
This type of free trade area mainly engaged in processing mainly to entrepot trade, international trade, warehousing and transportation services, supplemented by. Such as the Nigerian Free Trade Area.

(4) bonded warehousing type
This type of free trade area mainly to bonded, mainly exempt from foreign goods import and export procedures, a long time in a bonded state, such as the Netherlands Freeport Trade Zone in Amsterdam.

Laws and regulations
The main provisions of the WTO on free trade zones:

1. The purpose of the establishment of a free trade zone is to facilitate the trade between countries and regions that make up the free trade zone. Trade barriers are generally not higher than or in the absence of a free trade zone. The general limits of tariffs and trade regulations imposed by members of the district.

2. Any member who, if he decides to join a free trade zone or an interim provision for the establishment of a free trade zone, shall have a plan and schedule for the establishment of a free trade zone within a reasonable period.

3. Any member who decides to join a free trade zone or an interim agreement on the establishment of a free trade zone shall be communicated to all members in a timely manner and shall be provided with information on the proposed free trade area so that all members may consider and Submit a report and a proposal.

If all members find that the parties to the agreement are not likely to form a free trade area during the proposed period or that the proposed period is not reasonable, all members should make recommendations to the parties to the agreement, such as the fact that the parties to the agreement are not prepared It is proposed to amend the provisional provisions, the relevant agreement shall not be maintained or put into practice.

4. All important changes to the free trade area establishment plan or process schedule shall be communicated to all members. If this change would jeopardize or unduly delay the establishment of a free trade zone, all members may request consultations with the relevant members.

5. The reasonable period of a transitional interim agreement for the establishment of a free trade zone is only allowed for more than 10 years in exceptional circumstances, and when a member of the agreement considers that the 10-year period is insufficient, the need for a longer period of time The complete explanation.

6, the free trade zone to accept the World Trade Organization working group inspection, and regularly to the World Trade Organization Council to make a report on the implementation of the agreement. In today’s world, the development of the free trade area is very rapid, in the global scope of its number has reached dozens, covering all continents, is one of the main forms of regional economic integration.

Among them, the North American Free Trade Area and the ASEAN Free Trade Area of ​​the most typical significance, and the North American Free Trade Area is the world’s largest free trade zone. Other free trade zones include the China-EU Free Trade Area, the EU-Latin America Free Trade Zone and so on.

Overall, countries around the world attach great importance to the establishment and development of free trade zones to serve their own economic development, in addition to Asia, Japan, South Korea, the world almost all major trading countries have participated in the free trade zone, and some or more Members of a free trade zone.

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