The recent proliferation of preferential trade agreements (PTAs) marks an important shift in global trade governance. It also raises a number of challenging questions of economics, international relations, and international law. What explains the sharp rise in these agreements? How do increasing numbers of PTAs affect the multilateral system? Which interests benefit, and which are disadvantaged, by the turn to PTAs?

A burgeoning literature examines these and related issues, and Simon Lester and Bryan Mercurio's Bilateral and Regional Trade Agreements (BRTA), a two volume collection of edited papers, is a welcome addition to this scholarship. In this short review, I outline the structure of and some of the main arguments found in BRTA, and then briefly explore what this publication may signal with respect to scholarship on PTAs. My suggestion, in short, is that BRTA is useful not only in its own right, but also as an overview of the past, present, and future of thinking about PTAs.

The first volume of BRTA, subtitled ‘Commentary and Analysis’, consists of an introduction and sections that address (i) the economics and politics of PTAs; (ii) the relationships between PTAs and WTO and international law; and (iii) the treatment of specific trade policy issues, such as services and intellectual property, in various PTAs. The volume opens with chapters that address several of the enduring issues raised by PTAs. For example, Pravin Krishna's chapter provides a brief review of Viner's famous analysis of PTAs' ambiguous welfare effects, and then discusses more recent economic debates over PTAs, including whether it is possible to design a PTA that is necessarily welfare-improving.

Olivier Cattaneo's essay on the political economy of PTAs nicely compliments Krishna's economic review. Cattaneo reminds us that, as a historical matter, multilateralism is the exception rather than the rule. In claiming that both approaches reflect a balance between domestic political forces that favor liberalization and those that favor protection, Cattaneo highlights the political considerations that drive many PTAs. He argues that the US and the EU use PTAs as part of a ‘race for leadership’ to impose their preferred rules on the rest of the world, China pursues PTAs ‘to isolate Taiwan’, and many developing states enter into PTAs out of a ‘fear of exclusion’ and concerns over trade diversion.

David Evans's chapter details the emergence of a ‘new generation’ of PTAs that include agreements among regional groupings, such as the EU's negotiations with MERCOSUR, and agreements among states that are not geographically proximate. Drawing upon his rich experience as a trade diplomat, Evans highlights the complex negotiating dynamics associated with the new generation of plurilateral PTAs.

Having addressed the economics and the politics of PTAs, the volume then turns to legal issues. Andrew Mitchell and Nicholas Lockhart examine, in some detail, the WTO rules regarding PTAs. Drawing on treaty text and dispute resolution practice, Mitchell and Lockhart analyze virtually all of the significant legal issues surrounding the WTO-compatibility of PTAs. In the chapter that follows, Mitchell and Tania Voon analyze the relationships between PTAs and general public international law. Particularly interesting here is the discussion of how disputes under PTAs can contribute to the formation of customary international law, and the discussion of how conflicts between a PTA and the WTO, or among PTAs, should be handled. Several recent disputes illustrate that the potential for conflicts can no longer be dismissed,Footnote ¹ and Mitchell and Voon offer several ways that these conflicts can be addressed.

The final, and by far the longest, section of this volume addresses various subject areas typically included in modern PTAs. Timothy Josling analyses the contentious area of agriculture with specific reference to the different approaches found in bilateral and regional PTAs. Federico Ortino compares the basic features and specific provisions of the GATS with the treatment of services in PTAs, with special attention to the existence of GATS-plus obligations in many PTAs. Investment disputes have recently attracted much attention, and Joshua Meltzer's chapter details the legal and policy issues arising out of investment provisions in various PTAs. Controversy over the Obama Administration's stimulus bill underscored the trade implications of government procurement policies. Arwel Davies explores the rationale for including procurement provisions in trade agreements, and reviews PTA procurement provisions. Michael Handler and Bryan Mercurio examine the use of TRIPs-plus provisions in recent PTAs, with special attention to copyright, geographical indications, and patents. In his chapter, Lorand Bartels analyzes the explosive relationship between trade and social issues with a particular focus on the treatment of labour, environment, and human rights in PTAs. Finally, Victoria Donaldson and Simon Lester discuss the variety of dispute resolution mechanisms PTAs employ. Taken together, these chapters allow comparisons across various agreements, and among the norms being created in several important policy areas. Moreover, these chapters explore interesting questions of why states are willing to reach agreement on certain issues in a PTA when they resist similar terms in multilateral settings.

BRTA's second volume complements the essays described above by analyzing the provisions of specific PTAs. This volume contains chapters on the Australia–US agreement, by Andrew Mitchell and Tania Voon; the Central American-Dominican Republic–US Agreement, by Mauricio Salas; the Chile–China agreement, by Luz Sosa; the EU–Mexico agreement, by Bradly Condon; the EFTA–SACU agreement, by Peter Draper and Nkululeko Khumalo; the Japan–Mexico agreement, by Bryan Mercurio; the US–Morocco agreement, by Jason Keans; and the ASEAN–China agreement, by Jiangyu Wang. Each chapter includes a short introduction, a review of the negotiating process, analysis of the key substantive obligations, and a discussion of the agreement's implementation and impact. These papers illustrate the value of richly detailed and finely textured analysis of specific agreements, particularly those agreements that do not often receive sustained scholarly attention. Moreover, although each essay in this volume stands on its own, the convenient organizational structure facilitates comparison among agreements.

Bilateral and Regional Trade Agreements has much to offer to economists, lawyers, political scientists, and practitioners. Stepping back from the particulars of each paper, these volumes can be understood as illustrating three different approaches to the doctrinal, conceptual, and normative dilemmas PTAs pose.

PTAs – and scholarship addressing PTAs – are not new phenomena. Indeed, as Lester and Mercurio remind us in their introduction, ‘[t]he modern history of the world trade system, and in particular international trade agreements, is evidenced by shifts among bilateralism, regionalism and multilateralism’. Scholarly preoccupations arising out of these shifts in trade governance have likewise evolved over time.

Jacob Viner, Max Cordon, and other leading thinkers in the 1940s and 1950s identified many of the enduring economic and political economy questions surrounding PTAs, and many current debates over PTAs are framed and structured by classic analyses developed decades ago. BRTA's essays on the economics and politics of PTAs provide a useful overview of these classic debates, and in this sense the volumes capture an important historical tradition of thinking about regionalism.

Shifts in trade politics during the 1980s and 1990s, and resulting work by scholars such as Jagdish Bhagwati, Paul Krugman, and Larry Summers, marked a new era in thinking about PTAs.Footnote ² With multilateral trade talks at a standstill, and the US turn to regionalism, the locus of scholarly inquiry migrated from the specific state entering into a PTA to the systemic effects of PTAs. Economists and political scientists launched ongoing debates over whether PTAs were building blocks or stumbling blocks to multilateral trade, and the global welfare implications of spreading regionalism. The legal analogue of these debates involved arguments over the meaning and implications of the broad and imprecise language of GATT Article XXIV.Footnote ³

In much of this literature, the GATT/WTO system is taken as the empirical and normative baseline against which PTAs are measured – and often found wanting. A large number of BRTA's essays fit comfortably into this tradition, including Mitchell and Lockhart's legal analysis of WTO provisions regarding PTAs, Ortino's juxtaposition of GATS provisions with services commitments in PTAs, Davies's description of the influence of the WTO's procurement agreement on procurement provisions in PTAs, and Handler and Mercurio's examination of TRIPs-plus provisions in PTAs. In their focus and methodologies, these essays well-illustrate the dominant trends in much current research in this area.Footnote ⁴

Other contributions to BRTA may signal a new scholarly approach to PTAs. As the Evans chapter persuasively demonstrates, the new generation of PTAs differs from earlier PTAs in several important respects, including the broader range of issues addressed and the sometimes bewildering array of nations involved. Moreover as the chapters on investment, services, intellectual property and the like in the first volume suggest – and as the detailed case studies in the second volume confirm – it is neither accurate nor analytically useful to consider PTAs in an undifferentiated way. PTAs vary considerably along the lines of shallow versus deep integration, and in the number and types of parties involved. The methodological question presented is whether we can discern regionalism's future using the conceptual apparatus and vocabulary of regionalism's past. The new frontier of research in this area considers PTAs not simply in relation to the GATT/WTO system, but also as important subjects of study in their own right.

PTAs are now a prominent fixture in the trade domain. Trading nations have demonstrated that they see no contradiction in the simultaneous pursuit of multilateral and regional agreements, and recent trends suggest that PTAs will only increase in importance. BRTA examines PTAs through empirical, comparative, historical, and policy lenses and deepens our understanding of these diverse and complex agreements.