As multilateral negotiations become increasingly complex and protracted, preferential trade agreements have become the centrepiece of trade diplomacy, pushing beyond tariffs into deep integration and beyond regionalism into a web of bilateral deals, raising concerns about coercion by bigger players.
This study examines American, European and Asian approaches to preferential trade agreements and their effect on trade, investment and economic welfare. It draws on the rich field of theoretical works, but also fills a gap in the literature by examining in detail the actual substance of agreements negotiated and envisaged.
With bilateralism in trade driven by foreign policy, environmental and social concerns, as well as market access objectives, the key question today is not preferential agreements or multilateralism, but how the various negotiating forums interact. This volume argues that preferential agreements can complement the multilateral system but only if that system is strong enough to continue to reduce barriers to trade and strengthen rules and so limit the distorting effects of bilateralism.
Kenneth Heydon is a visiting fellow at the London School of Economics and a former deputy director for trade at the OECD. Stephen Woolcock is a lecturer at the London School of Economics and an associate fellow at the United Nations University—Comparative Regional Integration Studies in Brugge, Belgium.
Part 1: Introduction
Part 2: The issues: The nature and scope of PTA provisions
Part 3: Goals and outcomes: US, European and Asian approaches compared
Part 4: The effects
Part 5: Conclusion