The Content Of Preferential Trade Agreements

The ever-increasing number of preferential trade agreements (EPAs) is an important feature of international trade. The 2011 World Trade Report describes the historical evolution of THE EDFs and the current landscape of agreements. It examines the reasons why EPZs are being implemented, their economic benefits and the content of the agreements themselves. Finally, it deals with the interaction between EPZs and the multilateral trading system. An extensive version of this document was released under the name Hofmann et al. (2017), entitled “Horizontal Depth: A New Database on the Content of Preferential Trade Agreements”. We thank our legal advisors for this project, the law firm Batalla and in particular Priscilla Ortiz for the excellent work done in coding preferential trade agreements. We thank two anonymous referees, Rohini Acharya, Ana Cristina Molina, Alen Mulabdic, Robert Teh, Alan Winters (editor) and seminar participants from Stanford University, the World Bank and EIEF (Rome) for their comments on a previous project. Errors and omissions are our responsibility.

The cumulative opening of trade – multilateral, regional and unilateral – has reduced the margin of preferential tariff supply under the EPZs. As a result, only a small portion of world merchandise trade enjoys preferences and preferential tariffs are becoming less and less important in ATPs. > D. Anatomy of Preferential Trade Agreements (42 pages; 1063KB) II- WTO and preferential trade agreements: from coexistence to coherence The report concludes with an in-depth review of the challenge posed by EPAs to the multilateral trading system and proposes a number of options to strengthen coherence between these agreements and the WTO-regulated trading system. The report shows that more and more EPZs are going beyond preferential tariffs and that many non-tariff regulatory areas are being incorporated into the agreements. Summary: Preferential trade agreements are an important feature of the global trading system. Several issues, ranging from the rationale for preferential regimes to their effects on members, non-members and the broader multilateral trading system, are at the forefront of academic and political debates on trade policy. This paper presents a new database that provides a detailed assessment of the content of preferential regimes and examines the scope and applicability of provisions governing a wide range of policy areas. The database contains information on 279 agreements signed by 189 countries between 1958 and 2015. The analysis of the data confirms one of the most important conclusions of the literature: the preferred trade agreements become deeper and deeper over time. A growing number of these treaties govern an extensive system of action, often with legally binding provisions, in areas under the current mandate of the World Trade Organization and in areas outside the current mandate of the World Trade Organization, including the exercise of competition policy, investment, capital movements and the protection of intellectual property rights.

It is essential to take into account the evolution of the scope of preferential trade agreements in order to gain a more complete and accurate understanding of where the global trading system is going and how to improve its governance.

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