Preferential trade agreements (PTAs) have been forged for centuries. The first modern-day regional trade agreements were launched in the late 1950s. But it is since the 1990s that PTAs have spread like wildfire around the world. Over 200 regional trade agreements have been notified to the World Trade Organization (WTO); and the total number of agreements has reached almost 300. Almost all countries are member to at least one PTA, and most countries belong to two or more agreements at once. Not only have integration schemes proliferated; their content has become more complex and encompassing. Most agreements go beyond market access in goods to address trade in services and issues such as investment, intellectual property rights, competition policy, government procurement, and e-commerce.
PTAs have been accordingly at the center stage of trade policy in recent decades. The well-organized and well-written handbook of Preferential Trade Agreement Policies for Development, edited by Jean-Pierre Chauffour and Jean-Christophe Maur, provides a very helpful and comprehensive introduction to their world and their multiple dimensions for policymakers, general academics, and interested readers who are not necessarily economists or lawyers. The handbook first characterizes the PTA landscape, elaborates on the policy challenges associated with some of their specific modalities (i.e., North–South agreements and customs unions), discusses in a systematic manner their main effects on trade and location, and addresses the long-standing policy question of whether PTAs are building blocks for deeper multilateral trade liberalization, thereby helping the global trading system, or act as stumbling blocks, thus hampering this system. Successive chapters are devoted to separated, technically solid reviews of the PTAs provisions regarding specific disciplines and their effects, covering agriculture, rules of origin, trade remedies, product standards, technical barriers to trade and sanitary and phytosanitary measures, services, labor mobility, investment, trade facilitation, competition policy, public procurement, intellectual property, environment, labor rights, human rights, and dispute settlement. Each of these individual chapters is structured around a set of similar questions such as how do the respective provisions compare across PTAs and (when applicable) with WTO rules, and what are their legal and economic implications.
As a handbook, it has the advantage that each chapter can be read independently. However, these individual chapters are sometimes not enough to get the whole picture. We need to understand how all these pieces come together and interact with each other. A series of related questions easily come to mind in this respect. For example, are there systematic patterns (correlations) across disciplines across PTAs beyond those in which the EU and the US are involved? What are the consequences for PTA member countries when they move forward in some areas and do not do so in others areas? Does it matter which are those specific areas? Are there better forms of sequencing than others? Here, unfortunately, the handbook offers limited guidance for policymakers.
More generally, given that PTAs are conceived as relevant policy instruments in developing countries' development strategies, the reader wonders how these integration schemes interact with other, non-explicitly covered, policies that operate on non-tariff trade costs (e.g., those associated with transport and information barriers) in shaping their development perspectives. Thus, the importance of infrastructure policies aimed at reducing transport costs for PTAs to actually render their expected benefits has been underscored in several studies. This also applies to softer interventions such as production development policies addressing market failures such as innovation promotion and export and investment promotion. In particular, simultaneously acting on both the software (policy and regulation) and the hardware (physical infrastructure) of integration helps countries make more of it: such coordinated interventions facilitate trade, drive down the costs of business, and ensure a more equitable distribution of the gains from trade, thereby increasing stability.
Finally, a deeper treatment of both traditional and cutting-edge important issues is somehow missing. For instance, this is the case with the potential dynamic trade affects associated with PTAs, in particular the well-rooted idea among policymakers according to which, by reducing tariffs and thereby allowing for increased intra-regional exports, these agreements can foster exports to third countries. Similarly, given that production is increasingly segmented and spread over an international network of production sites, a more exhaustive examination of the interplay between PTAs and production fragmentation would be warranted. The same holds for the rationale and implications of forward-looking strategies that are currently being debated in policy circles and are likely to remain on the agenda such as convergence and multilateralization. Furthermore, the number of South–South PTAs has substantially increased in recent years and this has translated into an expanding set of South–South cooperation initiatives. Whereas the handbook devotes an entire chapter to North–South PTAs, no comparable analysis is included for South–South PTAs or for their specific cooperation experiences. Last but certainly not least, important institutional aspects of the PTAs such as the functionality of the dedicated integration architecture and its interaction with the national subsidiary organizations and the density of transnational private networks and private–public partnerships, which definitely play a role in determining the PTAs outcomes, if anything, are only tangentially considered. Clearly, those are important questions and someone should consider answering them in a companion handbook, organized in a systematic manner as this one does with the subjects covered.
All in all, this is an excellent handbook that fills a void in the extensive literature on PTAs that should and will become a reference source for both academia and practitioners.
