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Preferential Trading Area
A Preferential Trading Area (PTA) is a type of trade agreement where participating countries agree to give each other preferential treatment in terms of reduced tariffs and improved market access for certain goods.
Unlike a Free Trade Area, which requires all tariffs to be removed between member countries, PTAs allow for a more gradual reduction of tariffs.
Examples of PTAs include:
- The African, Caribbean, and Pacific Group of States (ACP) - a group of 79 African, Caribbean, and Pacific countries that have signed a trade agreement with the European Union (EU)
- The Association of Southeast Asian Nations Free Trade Area (AFTA) - a trade agreement among the 10 member states of the Association of Southeast Asian Nations (ASEAN) to promote economic integration in Southeast Asia
- The Southern African Development Community (SADC) Free Trade Area - a trade agreement among 15 countries in Southern Africa with the goal of promoting economic integration in the region.