Detailed explanation of the preferential coverage and policies of free trade pilot zones and free trade zones
Although Free Trade Zone (FTZ) and Free Trade Area (FTA) have similar names, there are significant differences in their establishment methods, preferential coverage and policies.
Concept
Free Trade Pilot Zone
A pilot free trade zone refers to a small, specific area established within a certain country or region that implements preferential taxation and special regulatory policies. Its establishment is relatively simple. It is independently established by a single sovereign country or region in accordance with the relevant regulations of the World Customs Organization (WCO). It does not need to negotiate with other countries. It can be said to be “internal”. The specific approach is for a sovereign country or region to delineate an area within its customs territory and implement policies such as tax incentives and even tariff reductions, relaxation of supplier investment access, and special customs supervision within the area, which is a unilateral opening-up act. .
Free Trade Zone
Free trade area is a proper term in the field of international economic and trade. It refers to two or more sovereign countries or separate customs areas signing an agreement to further open their markets to each other on the basis of the most-favored-nation status of the World Trade Organization and to phase out the majority of trade agreements. Tariffs and some non-tariff barriers for some or all goods improve market access conditions for services and investments, thereby forming a specific area for trade and investment liberalization. The content of the agreement is not decided by one party, but negotiated and formulated by the contracting parties. Therefore, the FTA is “negotiated” between a certain country or region and its free trade partners, and it can also be said to be “external”.
Discount coverage
Free Trade Pilot Zone
A pilot free trade zone is one or more “small circles” designated by a country or region within its customs territory that implement special preferential policies, covering only specific areas. When goods, services and investments enter the “small circle” of the free trade pilot zone, they can enjoy special preferential policies, but they cannot enjoy them in other areas of the country or region. In addition, the free trade pilot zone is open to “everyone” entering the zone and has universal applicability.
Free Trade Zone
A free trade area is a cross-border or cross-border “circle of friends” that covers the entire customs territory of each member that has signed a free trade agreement, rather than a certain part of it. In recent years, major economies have promoted the negotiation of free trade areas as an important strategic promotion, and free trade agreements have become an important means for major countries to engage in geopolitical and economic games. Free trade zones are only open to a specific circle of friends who have signed a free trade agreement.
Preferential policies
Free Trade Pilot Zone
The free trade pilot zone is different from the free trade zone in terms of exclusivity. It is open to “everyone” who carries out economic and trade activities in the pilot zone. Generally speaking, anyone can enter the free trade pilot zone to carry out economic and trade activities. Once entered, they can enjoy all the preferential policies of the pilot zone, which is universal. For example, my country and the United States have not yet signed a free trade agreement, but American companies can also enjoy the preferential policies of my country’s free trade pilot zones.
Free Trade Zone
Preferential policies on goods tariffs, services and investments under the framework of the free trade area are only applicable to countries that have signed free trade agreements. Countries that have not signed free trade agreements cannot enjoy them, and are highly exclusive. In other words, only members who have signed a free trade agreement are considered “friends” and can provide each other with preferential treatment. Those who have not entered the “friend circle” cannot enjoy it. Looking further, even if they belong to the same party’s free trade “friend circle”, each “friend” enjoys different rights, and the specific content depends on the mutual agreement between each free trade agreement partner.