From Preferential Trade Arrangements to Free Trade Agreements: One of the Downturns of Cooperation in International Relations?

Jose Jaime Baena-Rojas,Susana Herrero-Olarte

doi:10.3390/socsci9080139

Abstract

Since the signing of the General Agreement on Tariffs and Trade (GATT) and the creation of the World Trade Organization (WTO), preferential trade agreements (PTAs) have been an interesting tool to promote international cooperation through the granting of non-reciprocal and/or unilateral tariff preferences by developed countries to developing countries. These international agreements have tended to generate critical trade dependencies for the receiving countries. Due to the circumstances of world trade and due to the lack of interest of the grantors to maintain this type of tariff preference, these developing countries are forced to renegotiate their PTAs into to free trade agreements (FTAs). To demonstrate this, we conducted a qualitative analysis to characterize the behavior of PTAs and their impact on the configuration of FTAs and to obtain indicators and trends. The results suggested a predominance of FTAs and a decline in PTAs. This was done to maintain access to the markets within those granting countries, which also became the main trading partners of these PTA recipient countries.

Highlights

Preferential trade agreements (PTAs) have been regarded as a type of international treaty in which a country grants tariff preferences to either one or several countries, with the latter not obliged to offer any kind of tariff benefit to their counterpart in return
The foregoing has the aim of contextualizing why these types of international agreements are increasingly losing prominence. This was done while considering the current dynamics of international trade, where unilateral tariff concessions are becoming less common and where free trade agreements (FTAs) take on a special role in breaking down the ideal of cooperation that preferential trade agreements (PTAs) traditionally tended to promote
Period after the end of World War II, precisely when international cooperation gained a prominent role in international relations and right after the signing of the General Agreement on Tariffs and Trade (GATT) as a system of rules to regulate international trade

Summary

Introduction

Preferential trade agreements (PTAs) have been regarded as a type of international treaty in which a country grants tariff preferences to either one or several countries, with the latter not obliged to offer any kind of tariff benefit to their counterpart in return. It can be said that PTAs can be understood as a way in which special and differential treatment (S&D) is applied, consisting of the adoption of asymmetric trade liberalization measures and programs that typically end up reflecting non-reciprocal trade preferences among different states within the international political system (Giordano et al 2004). S&D, by definition, highlights the dynamics of international relations among countries with dissimilar levels of development. By default, this leads to negotiating commercial schemes of non-reciprocal, concessional treatment in order to favor those countries with development problems, with the purpose of enhancing their growth and subsequently facilitating their insertion into world trade.

Methods

Results

Discussion

Conclusion