PTA’s role as stepping stones

PTA’s role as stepping stones

Introduction

Under the current circumstances, it is not possible to give a unique straightforward answer to the question about the role or function that preferential trade agreements – PTAs – could be playing within the multilateral trade system. However, considering the goals achieved over the years for the multilateral system, it is possible to argue that these agreements are more likely to become stepping stones, as long as they continue to promote openness and trade liberalization remains as the main objective. Thus, under that condition, PTAs could serve as a complementary support to the system.

On the other hand, there are some risks that will need to be monitored since PTAs are not necessarily homogeneous, and depend on several factors such as the characteristics of the parties involved, the content and coverage of the commitments, the enforcement mechanisms they include, among others. Regardless, there are other aspects related to the implementation of domestic protectionist measures, which could cause a setback in the multilateral system before a PTA does.

The PTAs’ backstage

In order to put things in context, it is necessary to remember that the history of international trade has been dynamic and cyclic and the establishment of a multilateral trading system does not prevent the trading community from having to face those cycles. PTAs are part of the present cycle and have proliferated as a response to the impossibility to negotiate multilaterally, and reach an agreement on sensitive issues that go beyond trade barriers. The problem in the negotiations is based in the existing asymmetries among members; therefore it has not been possible to find a balance between the different positions and reach consensus.

Countries, then, have found in bilateral negotiations of PTAs with compatible trading partners, an alternative to balance their differences and at the same time secure benefits. The concerns showed up not only when they started to increase in number but when their scope became broader as well. An additional effect of the proliferation of a network of agreements is that many of them have the same parties in more than one.

In contrast to what could be expected, those concerns might be laying the foundations for future global negotiations. Clearly, in some cases countries have been able to work out their different positions regarding several non-trade subject matters within a smaller negotiation environment. In fact, one of the features of these PTAs is their extended coverage since they include areas related to development, education, labour, financial assistance, energy, health, anti-corruption, mining, etc., reflecting how the interests of the international actors are evolving. In other words, the global agenda needs to be redirected and the multilateral system needs to evolve with it.

The above mentioned in no way implies the end of the WTO; on the contrary, it means that the multilateral trading system has to be restructured in a way that becomes more inclusive, and the PTAs’ network could serve as a guideline to that process.

Another feature

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