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The second Trump Administration, in office since January 2025, has disrupted the prevailing trade consensus. The corner stone of the new US trade policy is the re-introduction of old-style tariffs at substantial levels to create a so-called ‘tariff wall’ turning away from long-standing practices of tariff liberalization. According to the US Administration, the tariffs pursue multiple objectives. They incentivize re-industrialization, generate revenue, and lower trade deficits with many trading partners. The imposition of new tariffs is coupled with the pursuit of bilateral deals to extract business-type concessions from governments and to encourage investments into the US.
Important developments are currently affecting the global trading system. We witness increasing calls for protectionism and a surge in populism in some major economies, while other trading nations continue to liberalise trade, driven by the dynamics of global value chains (GVCs). Even committed trading nations have shown an increased willingness to use industrial policies and have elevated the pursuit of geopolitical concerns through trade. On top of this, calls have increased to tackle the climate crisis through trade policy instruments. In short, important shifts induced by politics and economics shape today’s trade policies.
In this chapter we provide a general overview of trends in PTAs in Latin America (LA), with an emphasis on PTA design and diffusion. We base the chapter around four primary tasks. First, we review extant theoretical accounts underlying the motivations for LA countries’ engagement with PTAs. We classify countries into three groups – the liberal traders, post-liberals and anti-liberals – based on their approach to PTA partner selection and design. Second, we compare Latin America to other world regions. We show that countries in the region sign many PTAs on average, but that design features vary considerably within the region. Third, we show that PTA design in the region is influenced by both economic and political factors. Fourth, we use quantitative text analysis to analyse whether common models or templates can be observed in the region. We find some evidence that agreements involving the US have diffused within the region, but we fail to uncover strong evidence of a single template or templates that LA countries routinely adopt. Overall, our analysis paints a picture of a heterogeneous region where domestic political and economic factors affect how countries engage with the world economy through PTAs.
The approach of Latin American countries to preferential trade agreements (PTAs) is a fascinating topic. There is a rich history of policymakers using PTAs to pursue different economic and political models of integration. What really stands out is the diversity of approaches and attitudes to the use of PTAs. While some countries have been rule-makers and have made innovative attempts to introduce new issues, others have been reluctant to use PTAs. In response to the growing interest in and politicisation of PTAs in the wider public – including renewed consideration of 'with whom to trade' – this book brings together scholars from inside and outside Latin America to address the past, present, and future challenges associated with PTAs. The contributions, from a variety of disciplinary backgrounds, offer new insights into issues related to the design, diffusion, and impact of PTAs. This title is also available as open access on Cambridge Core.
The Concept Design of a 21st Century Preferential Trade Agreement describes the current status and possible future evolution of trade agreements. The individual contributions provide fine-grained analyses of the various challenges trade agreements face and how these differ across countries. The book brings together leading researchers from international law and international relations to provide conceptual and empirical insights to inform the ongoing reform debates. By taking stock of scholarly advances, the book further aims at stimulating cross-fertilization in the study of trade agreements in the field of international economic law. This title is also available as Open Access on Cambridge Core.
This chapter outlines the motivation behind the volume. There are few forward-looking scholarly contributions to the literature on PTA design possibilities. The chapter begins by outlining the case for more such thinking. Based on the Desta database, the chapter maps developments over time as to PTA signing generally and PTA design in particular. It also highlights certain features of the present landscape that also suggest the need for more innovation. For example, it takes note of the governments that are at the forefront of using PTAs to integrate markets and discusses trends in boilerplate language in the development of PTA design. Finally, the chapter summarizes the main findings of the different chapters in the volume that follow this introductory chapter.