Chapter 13: The Commodity Coverage of PTAs: Does Agriculture Matter?
Donald MacLaren INTRODUCTION Preferential trade agreements (PTAs) have recently taken centre stage in trade relations between countries. The Asia-Paciﬁc region has been no exception.1 Several reasons have been suggested to explain the development of bilateral and plurilateral preferential trade agreements. These include: ﬁrst, negotiations are likely to be more straightforward with fewer countries and the gains from trade will arrive sooner than with multilateral negotiations; second, the fewer the number of countries involved, the greater the number of issues which can be included (the notion of ‘deep integration’); third, the economic costs of adjustment may be smaller with an agreement amongst similar economies; fourth, a PTA may make inward FDI more attractive; and ﬁfth, countries fear being left out of agreements, thereby forgoing any net beneﬁts to be derived from membership and, therefore, losing from being a non-member country in a world replete with PTAs. In the past decade, with the substantial increase in PTAs being negotiated and the hub and spokes arrangements that are now emerging amongst intersecting PTAs, discriminatory treatment has grown and the WTO has failed the excluded members, many of which are developing and leastdeveloped countries. These excluded Members suﬀer from diminished social welfare.2 This hub and spokes architecture has created the ‘spaghetti bowl eﬀect’ (see Bhagwati et al. 1998, p. 1138; Crawford and Fiorentino 2005; and Lloyd and MacLaren 2004, Figure 1) and, increasingly, multilayered discrimination. This form of discrimination in turn leads to complex rules of origin with attendant substantial...
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