4 - Bilateral and plurilateral PTAs

Summary

Introduction

The immense level of international effort being devoted to free trade agreements (FTA) negotiations shows no sign of abating. Negotiating PTAs has been elevated from a sideshow to the World Trade Organisation (WTO) to centre stage in many countries' trade policies. The halting pace of the Doha Round has increased the pressure to find alternatives. Many of the obvious and easy deals and partnerships have been formed, but the search for new partners continues.

A significant portion of recent PTA activity is directed at negotiating plurilateral PTAs. This is nothing new. Many of the best-known and most successful PTAs are multipartite unions, such as the European Union (EU) and North American Free Trade Agreement (NAFTA). Likewise the phenomenon of the ‘hub and spoke’ pattern of agreements is also well recognised, whereby an established ‘hub’ such as the EU seeks out separate PTAs with a number of ‘spoke’ countries.

An examination of a number of recent plurilateral PTA negotiations, however, reveals that they do not fit so easily into this pattern. There seems to be a growing tendency to negotiate plurilateral PTAs amongst more tenuous groupings with looser underlying linkages. Some involve disparate countries that are unlikely to ever have the cohesion or concentration to operate as a hub.