‘New Age’ Preferential Trade Agreements and Global Value Chains: A Comparative Sectoral Analysis

The past three decades witnessed a simultaneous proliferation in the number of preferential trade agreements (PTAs) and the network of global value chains (GVCs). The rise in the number of PTAs has been accompanied by inclusion of ‘deeper’ provisions such as services, competition, intellectual property rights (IPR), etc. This study aims to explain the differential impact PTA ‘depth’ on trade in value added as well as the heterogeneous results observed across industries based on their distinctive characteristics. For this purpose, an augmented gravity equation with three-way fixed effects is estimated, using a relatively newer dataset for the time period 2000-2015 for 64 countries. The results conclude that the PTA ‘depth’ determined by nontariff and ‘behind-the-border’ provisions leads to greater participation of member countries in GVCs. Furthermore, it is shown that value added trade for a sector like automotive, which has higher product differentiation, intra-industry trade, IPR and FDI linkages is most impacted by the PTA ‘depth’.

Essays On Deep Trade Agreements

<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>

Essays On Deep Trade Agreements

<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>

Labour Rights Protection and Its Enforcement Under the USMCA: Insights From a Comparative Legal Analysis

Chapter 23, exclusively dedicated to labor protection, has been widely described as one of the most distinctive features of the new US–Mexico–Canada Agreement (USMCA). This paper challenges the current narrative surrounding the USMCA by critically analysing Chapter 23 of the agreement, looking at the legal innovative design of its substantive commitments of labour protection and their enforceability. In light of this objective, a comparative analysis will be conducted. The provisions of Chapter 23 USMCA will be compared with labour provisions in previous US Preferential Trade Agreements (PTAs), namely, the NAFTA side agreement on labour rights and the TPP. Second, a comparative analysis will be conducted comparing USMCA Chapter 23 with labour provisions in EU Trade Agreements negotiated with USMCA parties. The paper demonstrates that although the USMCA does not radically innovate from the level of substantive labour protection reached in recent US and EU PTAs, the enforcement mechanism in the USMCA is significantly strengthened, with controversial and innovative features.