ARE PREFERENTIAL TRADE AGREEMENTS STUMBLING BLOCKS?

2012 ◽  
Vol 57 (04) ◽  
pp. 1250030
Author(s):  
KORNKARUN CHEEWATRAKOOLPONG
Keyword(s):  
Building Blocks ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Bargaining Game ◽  
Trading System ◽  
Preferential Trade ◽  
Sequential Bargaining ◽  
Multilateral Trading System ◽  
Sequential Bargaining Game

This paper studies the effect of preferential trade agreements (PTAs) on multilateral trading system using a sequential bargaining game. The study considers two formats of PTAs, i.e., when the PTA tariffs are specified before the formation of PTAs and when PTA members have to negotiate PTA tariffs after the formation of PTAs. The study finds that PTAs with specified tariffs can be building blocks to multilateral liberalization while PTAs without specified tariffs are stumbling blocks. The paper also concludes that PTAs can eliminate bargaining inefficiency called forward manipulation when PTA tariffs are specified before PTA negotiation.

scholarly journals Always look at the bright side of non-delivery: WTO and Preferential Trade Agreements, yesterday and today

2011 ◽  
Vol 10 (3) ◽  
pp. 375-387 ◽  
Author(s):  
PETROS C. MAVROIDIS
Keyword(s):  
A Priori ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Empirical Literature ◽  
Trading System ◽  
Preferential Trade ◽  
Do No Harm ◽  
Multilateral Trading System ◽  
The Multilateral Trading System

AbstractThe disciplining of Preferential Trade Agreements (PTAs) by the WTO has been ‘relaxed’ recently as a result of the new context (the Transparency Mechanism) within which notified PTAs are being multilaterally reviewed. This is probably a blessing for a number of reasons, including the success of the multilateral trading system in bringing tariffs down over the years (and the ensuing reduced trade diversion), the fact that modern PTAs deal with many non-trade issues as well (for which no WTO disciplines exist), and the recent empirical literature suggesting overall positive welfare implications for those participating in similar schemes. This paper discusses these and other reasons to support the view that the WTO should rather focus on the multilateral agenda instead of diverting its attention towards disciplining PTAs. In more concrete terms, this paper argues in support of the thesis that the Transparency Mechanism should not be simply a de facto substitute of the previous regime (where outlawing a PTA could not a priori be excluded), but the de jure new forum to discuss PTAs within the multilateral trading system, at least for the time being. A first do-no-harm-policy is one of the rationales for the thesis advocated here.

scholarly journals Essays On Deep Trade Agreements

2021 ◽  
Author(s):  
Sara Rohany-Tabatabai
Keyword(s):  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Economic Policies ◽  
Natural Question ◽  
Trading System ◽  
Intermediate Inputs ◽  
Bilateral Agreements ◽  
Multilateral Trading System ◽  
Multilateral Agreements ◽  
Deep Integration

<div>The number of preferential trade agreements (PTAs) has increased tremendously since 1990. The natural question to ask is why. PTAs are not only about lowering down tariffs further than the most favoured nation (MFN) tariff levels. There are many economic and non-economic policies other than border policies that are addressed in PTAs. Trade agreements dealing with border policies (tariffs) are referred to as “shallow”; and those that are dealing with a broader set of policies are referred to as “deep”. Therefore, PTAs are about something deeper. Parallel to the increase in the PTAs, trade in intermediate inputs has grown exponentially over past decades. Therefore, the first question that arises is whether trade in intermediate inputs generates the need for deep integration. In this dissertation, we show that the nature of trade in intermediate goods requires deep integration. The second question to be addressed is whether the deep trade agreements need to be preferential. With a three-country model, we show that the deep bilateral agreements are rarely chosen over the shallow agreements. Finally, by introducing the deep integration in the multilateral trading system, we conclude that although trade in intermediate inputs calls for deep integration, they do not call for deep PTAs. However, deep integration is better implied under multilateral agreements. Therefore, the deep integration in economic policies does not contribute to the increase in the number of PTAs.</div>

scholarly journals Are Preferential Trading Arrangements Trade-Liberalizing or Protectionist?

1999 ◽  
Vol 13 (4) ◽  
pp. 105-124 ◽  
Author(s):  
Anne O Krueger
Keyword(s):  
Empirical Evidence ◽  
Free Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Trading System ◽  
Preferential Trade ◽  
Multilateral Trading System ◽  
Preferential Trading ◽  
Preferential Trading Arrangements

Preferential trade arrangements, and especially free trade agreements, have mushroomed in importance in the 1990s. This has revived research on the effects of these arrangements, both on the welfare of the member countries and those excluded, and on the momentum for further liberalization of the open multilateral trading system. This paper reviews the analyses and evidence to date as to these effects, showing that analytically anything can happen and that, to date, there has been insufficient experience to draw conclusions from empirical evidence.

Regional Trade Agreements in a Multilateral Trade Regime

2005 ◽  
Vol 40 (1) ◽  
pp. 27-48 ◽  
Author(s):  
Parthapratim Pal
Keyword(s):  
Building Blocks ◽  
Trade Agreements ◽  
Regional Trade Agreements ◽  
Regional Trade ◽  
Trading System ◽  
Multilateral Trading System ◽  
International Trading ◽  
World Trading System ◽  
Intense Debate ◽  
The Multilateral Trading System

One of the most striking developments in the world trading system since the mid 1990s has been the surge in Regional Trade Agreements (RTAs). From about 50 till 1990, the number of RTAs has crossed 250 in 2003. As trading within RTAs does not come under the purview of World Trade Organization (WTO), this explosive growth of regionalism is threatening to emerge as an alternative to the WTO led international trading system. This has initiated an intense debate among economists whether RTAs are “building blocks” or “stumbling blocks” of the multilateral trading system. In this backdrop, this paper traces the reasons behind this resurgent regionalism and surveys the literature on RTAs and its interaction with the multilateral trading system. This paper attempts to look at these issues from the perspective of a developing country.

scholarly journals Essays On Deep Trade Agreements

2021 ◽  
Author(s):  
Sara Rohany-Tabatabai
Keyword(s):  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Economic Policies ◽  
Natural Question ◽  
Trading System ◽  
Intermediate Inputs ◽  
Bilateral Agreements ◽  
Multilateral Trading System ◽  
Multilateral Agreements ◽  
Deep Integration

<div>The number of preferential trade agreements (PTAs) has increased tremendously since 1990. The natural question to ask is why. PTAs are not only about lowering down tariffs further than the most favoured nation (MFN) tariff levels. There are many economic and non-economic policies other than border policies that are addressed in PTAs. Trade agreements dealing with border policies (tariffs) are referred to as “shallow”; and those that are dealing with a broader set of policies are referred to as “deep”. Therefore, PTAs are about something deeper. Parallel to the increase in the PTAs, trade in intermediate inputs has grown exponentially over past decades. Therefore, the first question that arises is whether trade in intermediate inputs generates the need for deep integration. In this dissertation, we show that the nature of trade in intermediate goods requires deep integration. The second question to be addressed is whether the deep trade agreements need to be preferential. With a three-country model, we show that the deep bilateral agreements are rarely chosen over the shallow agreements. Finally, by introducing the deep integration in the multilateral trading system, we conclude that although trade in intermediate inputs calls for deep integration, they do not call for deep PTAs. However, deep integration is better implied under multilateral agreements. Therefore, the deep integration in economic policies does not contribute to the increase in the number of PTAs.</div>

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