Read the article and answer the question based on what you read. Please DO NOT PLAGIARISM.

2. What is a preferential trading agreement (PTA)?

Article: The wording of the GATT articles was changed to permit certain free trade agreements as well as customs unions (Hart, 1994). The upshot was that Article XXIV of the GATT allowed "preferential trading arrangements," provided that: 1) preferences were 100 percent (that is, tariff levels between the partners were zero); 2) there would be a definite plan and timetable for achieving free trade among the participants;3) the PTA was to be phased in on a definite timetable; and 4) the PTA did not increase protection against the rest of the world (Dam, 1970). The overall import of these conditions was that a "preferential trading agreement" should lean closer to the notion of a customs union, rather than representing a return to the old regime of bilaterally negotiated sector-by-sector tariffs.In the first three decades of GATT, from the late 1940s into the late 1970s, the trend toward multilateral free trade dominated any tendencies toward customs unions or preferential trading agreements. Indeed, most of the preferential trading agreements and customs unions that were formed during this time were relatively unimportant or complete failures.