3 results
3 - The political economy of PTAs
- from Part II - Economics and politics of PTAs
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- By Olivier Cattaneo, Yale University
- Edited by Simon Lester, Bryan Mercurio, The Chinese University of Hong Kong, Lorand Bartels, University of Cambridge
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- Book:
- Bilateral and Regional Trade Agreements
- Published online:
- 05 October 2015
- Print publication:
- 07 January 2016, pp 28-52
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Summary
I. Introduction: Re-thinking the paradigm of bilateral/regional trade agreements
Why do countries conclude bilateral/regional trade agreements? Numerous researchers have sought to answer this question, most often through creating a typology of the agreements. Such efforts, however, have been in vain. A bilateral/regional trade agreement is rarely, if ever, based on a single motive, and two or more parties to an agreement can often have different and sometimes even conflicting objectives (e.g., one seeking market access and the other political support). In fact, different actors within each country itself can also have different objectives (e.g., one sector seeking trade creation whilst another trade diversion). Thus, any typology is bound to create artificial categories, and would not necessarily give a proper or accurate answer to the original question.
Sometimes, countries fall into a similar trap by trying to explain the rationale behind their bilateral/regional trade policy. For example, in its ‘Global Europe’ Communication (2006), the European Commission acknowledged that it had been predominantly motivated by political considerations in concluding trade agreements with countries that were candidates for European Union (EU) membership (with the exception of Mexico, South Africa, and Chile). Although such a policy was in line with the EU's neighbourhood and development objectives, it did little to serve the EU's central trade interests. The EU therefore designed a new strategy, where economics was restored as the chief criterion for future bilateral agreements. Future partners would be selected on the basis of:
• their market potential (economic size and growth),
• their level of protection against EU export interests (tariffs and non-tariff barriers), and
• the state of negotiations with EU competitors (to measure the likely impact of a bilateral agreement with a competitor on EU markets and economy, as well as the risk of erosion of the preferential access to EU markets currently enjoyed by the EU's neighbouring and developing country partners).
The Commission concluded that the Association of Southeast Asian Nations (ASEAN), Korea, and the Common Market of the Southern Cone (MERCOSUR) were ‘priorities’; while India, Russia, and the Gulf Co-operation Council (GCC) were ‘of direct interest’; and China, although meeting the criteria, ‘required special attention’ because of both the potential and risks it presented.
20 - Global trade governance and development
- from Part IV - Making WTO negotiations and decision-making processes fairer
- Edited by Carolyn Deere Birkbeck
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- Book:
- Making Global Trade Governance Work for Development
- Published online:
- 07 September 2011
- Print publication:
- 18 August 2011, pp 552-576
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Summary
The set of non-discriminatory trading rules embedded in World Trade Organization (WTO) agreements has the characteristics of a global public good, and the WTO, as the main institutional framework for global trade governance, has a key role in facilitating an open international trading system. In the United Nations Millennium Declaration the international community committed to ‘develop further an open trading and financial system that is rule-based, predictable, and non discriminatory’ with a view ‘to ensure that globalization becomes a positive force for all the world’s people’ (Millennium Development Goal (MDG) No. 8). Acceding to the WTO implies sharing responsibility in the governance of this global public good. Hence, universal membership of the WTO seems, prima facie, a worthwhile goal.
The WTO, however, faces a dilemma. On one hand, it inherits the old tradition of the General Agreement on Tariffs and Trade (GATT), whereby countries contribute to the objective of promoting trade ‘by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce’ (Preamble of the GATT 1947 and 1994). In other words, accession to the WTO implies ‘reciprocity’. At the same time, the central position of the WTO in the world trading system and the objective of universal Membership suggests that the ‘cost’ of accession should be kept as low as possible, so as to not exclude the poorest countries. In practice, however, tensions between the WTO’s mercantilist heritage and its role as the institutional vessel for a global public good produce a number of challenges with respect to accession procedures.
3 - The political economy of PTAs
- Edited by Simon Lester, Bryan Mercurio, The Chinese University of Hong Kong
-
- Book:
- Bilateral and Regional Trade Agreements
- Published online:
- 16 December 2009
- Print publication:
- 22 January 2009, pp 28-51
-
- Chapter
- Export citation
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Summary
Introduction: Re-thinking the paradigm of Bilateral/Regional Trade Agreements
Why do countries conclude bilateral/regional trade agreements? Numerous researchers have sought to answer this question, most often through creating a typology of the agreements. Such efforts, however, have been in vain. A bilateral/regional trade agreement is rarely, if ever, based on a single motive, and two or more parties to an agreement can often have different and sometimes even conflicting objectives (e.g., one seeking market access and the other political support). In fact, different actors within each country itself can also have different objectives (e.g., one sector seeking trade creation whilst another trade diversion). Thus, any typology is bound to create artificial categories, and would not necessarily give a proper or accurate answer to the original question.
Sometimes, countries fall into a similar trap by trying to explain the rationale behind their bilateral/regional trade policy. For example, the European Commission recently acknowledged that it had been predominantly motivated by political considerations in concluding trade agreements with countries that were candidates for European Union (EU) membership (with the exception of Mexico, South Africa, and Chile). Although such a policy is in line with the EU's neighbourhood and development objectives, it does little to serve the EU's central trade interests.