Saving the World Trade Order from the Bottom Up: A Role for Preferential Trade Agreements

Abstract

After a recent and important increase, to date around 300 preferential trade agreements (PTAs) exist and have been, thus far, regarded with quite some caution by Geneva. But could they be of help in a scenario, where the WTO becomes less relevant or indeed, is left out of the picture entirely? Some earlier voices do, in fact, suggest that PTAs could and should become more “multilateralized” and that they produce positive spillover effects for a wider trade community. Moreover, emerging large agreements may be capable of bridging trade regions and of encompassing important parts of world trade. When scrutinised, however, such agreements are far from capable of providing market access for everyone everywhere, to the same extent the WTO does. And while PTAs promote and advance coherence in regulatory policies, it is the WTO that sets the ultimate limits to their right to regulate. Beyond these substantial functions, world trade is in need of governance. If developed further, PTAs dispute settlement system could be of help in this regard. PTAs can and already do contribute to rule innovation and facilitate related negotiations. Nevertheless, it is almost inconceivable that they could ever act as a world trade forum, where everyone has a say on issues concerning global trade at large.