Partial scope agreement or PSA refers to a trade agreement between two or more countries that covers a limited range of goods and services. It is a type of preferential trade agreement that usually focuses on specific sectors with reduced tariffs and other trade barriers.
The primary objective of a partial scope agreement is to enhance economic cooperation between the participating countries while pursuing their respective national interests. It is considered as a step towards a full-fledged free trade agreement (FTA) that covers all aspects of trade, including investment, intellectual property, and services.
A partial scope agreement typically covers a specific number of products or services that are important to the participating countries. For instance, a PSA between India and Sri Lanka covers over 4,000 products in the areas of agriculture, textiles, gems and jewellery, and automobile parts. Similarly, a PSA between Mexico and Uruguay focuses on the trade of automobiles, chemicals, and pharmaceuticals.
PSAs can be bilateral or multilateral, depending on the number of countries involved. They are usually negotiated on a case-by-case basis, and the terms of the agreement are tailored to meet the specific needs of the participating countries.
One of the benefits of a partial scope agreement is that it provides a platform for the participating countries to explore the potential benefits of a full-fledged free trade agreement. Through a PSA, the countries can gain experience in negotiating and implementing trade agreements, which can help to build momentum towards larger trade agreements.
Another advantage of a partial scope agreement is that it can help to promote regional integration. By reducing trade barriers between neighboring countries, PSAs can lead to the creation of regional supply chains and the development of new business opportunities.
In conclusion, a partial scope agreement is a trade agreement that covers a limited range of goods and services between two or more countries. PSAs are a stepping stone towards larger trade agreements such as free trade agreements and can promote economic cooperation between participating countries. They are customized to meet the specific needs of the countries involved and can help to promote regional integration.