4 - Bilateral and plurilateral PTAs

Summary

I. Introduction

The immense level of international effort being devoted to free trade agreements (FTA) negotiations shows no sign of abating. Negotiating preferential trade agreements (PTAs) has been elevated from a sideshow to the World Trade Organization (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 ever to have the cohesion or concentration to operate as a hub. Others may bear a certain resemblance to the ‘hub and spoke’ pattern, but on closer examination show significant differences resulting from the fact that the ‘hub’ or the ‘spoke’ is comprised of a group of countries that is still in the process of pursuing internal economic integration at the same time as negotiating externally with third countries.

These ‘new generation’ plurilateral PTAs pose new complexities and challenges. Academic writing has tried to keep apace. A smorgasbord of food-related metaphors has emerged, and whether the preference is for Italian (spaghetti) or Asian (noodles), the general view is of a bowl beginning to overflow. Attempts are made to grapple with the important but complex question of whether this constitutes a building block or stumbling block to global economic well being. Analysis in that context, understandably, focuses on qualitative analysis of the nature and scope of PTA obligations.