I. Regional Trade Agreements -----RTA

　　Regional Trade Agreements are the privileged trade agreements signed by regions, which make the degree of freedom among the regions higher than that between the member of the region and the non-member of the region.

　　Regional Trade Agreements belong to the regional economic cooperation, which is the measure adopted by the members in some region to promote the cooperation and increase th e economic profits of the members. In accordance with the degree of the cooperation, the regional economic cooperation can be divided to five forms[1] :

　　A. the basic one ----- Preferential Trading Agreements, PTAs: each of the members decreases the rate of the customs and the trade barrier while keep the higher bar riers with the non-members.

　　B. Free Trade Agreement/Area, FTA: it is a reciprocal agreement aimed at the elimination of the trade barriers among the members, whereas the members can decide the trade barriers with the non-members.

　　C. Custom Union: the members will not only eliminate the trade barrier with each other, but also adopt the same customs policy with the non-members.

　　D. Common Markets: besides the elimination of the trade barrier, the free transfer of the produced elements among the members is also allowed. For example, the European Common Market.

　　E. Economic Unions: the members of the region will adopt the same finance and trade policies and will use the same money.

　　II. RTA as the exception of the Most-Favored-Nation

　　The privilege of the RTA given to the members is different from that of the WTO' s multi and categorical MFN.

　　Most-favored-nation treatment principle under WTO system, means that one country' s preferential treatment in trade, navigation, tariff, national legal status etc can't be lower than that while offering the preferential treatment to another country now or offering the preferential treatment to any third country in the future. Different from bilateral most-favored-nation treatment between the traditional countries, what WTO confirmed is a kind of multilateral most-favored-nation treatment, which the members of WTO will offer unconditionally and immediately for any other members. It is the equal treatment that made all members of WTO enjoy the equal international trade. It will guarantee all the members to carry on fair trade to compete on the same level, and also lighten the trouble of the bilateral treaties among members.

　　But the favour on tax revenue of trade given by RTA, is a kind of conditional tax allowance among a small circle.

　　According to a series of protocols of WTO, WTO affirms the RTA’s method, thought this is a kind of exception to " most-favored-nation treatment principle ".

　　III. regional negative effect on WTO of trade agreement

　　The regional trade agreement has become the second-class excellent choices of the numerous countries because of the stagnation of WTO Doha agenda. But the regional trade agreement will influence the regular transparency of trade after all and will violate some basic principles of WTO, therefore it has brought some negative influence to WTO’s MFN.

　　 RTA has disguise in form: namely it does not give member's more terrible treatment outside the region directly, but carry on by offering member's more favorable treatment in the region, so this kind of violating to MFN treatment principle in fact has not brought too great impact to WTO member outside the region within some time.[2] However, with the increasing of RTA day by day, people will gradually realize that RTA has brought the enormous challenge to the most basic essential principle “most-favored-nation treatment principle " of WTO system.

　　RTA offered members in its region with the favorable tariff policy, which makes WTO members no longer in the same starting line like script anticipation one. The favorable tax rates that given by a series of protocols signed on the basis of accession to the WTO are all higher than RTA’s. For example European Union is now only applying the rates of the MFN in nine countries, while apply generally preferential rates to other countries based on Regional Trade Agreements. So, the report " The Future of the WTO " (namely the so-called Sutherland report ) ,published in January of 2005 in WTO by the consultative committee about WTO operation way ,points out that the customs tariff of the most-favored-nation treatment principle has already become the worst customs tariff of the condition actually, the most-favored-nation treatment principle is not nowadays known as " the worst country's treatment principle " (Least-Favored-Nation treatment more ) as the more appropriate one now. [3]

　　RTA erodes the MFN in WTO by the rules of origin. In order to solve the third country using the facility of the liberalization of trade within the area, which means “hitchhikes", the regional trade agreement generally has a strict regulation rule of origin. The rules of origin can play an important role in preventing shifting trade, which means avoiding the non-RTA’s members’ products enjoying the favorable trade rates by using the preferential treatment country. But in using, it will certainly generate the trade barrier, because the rules of origin will encourage the trade between the RTA’s member and repel the products outside the region, which will make the provisions of RTA’s members use the members products although the outside members products’ price is much lower, in this way they can obtain the preferential treatment of the final products. The rules of origin are easy to be utilized as a kind of trade protection tool by RTA members, deviated from the most-favored-nation treatment principle under WTO system.

　　So, " The Future of the WTO " report points out, in the past 50 years after GATT is set up, the most-favored-nation treatment principle is no longer a basic rule, and has turned into a kind of exception. Though most trade is still set up on the basis of most-favored-nation treatment principle, " Italian noodle bowl "(RTA like the noodles in the bowl, entangle together, can not cut short) by various kinds of tax revenue alliances, common market, provincialism or bilateral free trade area, has made the most-favored-nation treatment principle turned into a kind of exceptional clause . [4]