Negotiating a Preferential Trading Agreement

Negotiating a Preferential Trading Agreement

Issues, Constraints and Practical Options

Edited by Sisira Jayasuria, Donald MacLaren and Gary Magee

Presenting a blend of economics and law, this book provides unique insights as well as practical guidance for negotiators considering major issues on the agendas of bilateral and regional preferential trading agreements (PTAs).

Chapter 1: Introduction

Sisira Jayasuriya and Gary Magee

Subjects: asian studies, asian urban and regional studies, business and management, international business, economics and finance, international business, international economics


Sisira Jayasuriya and Gary Magee Preferential trading agreements (PTAs) – often misleadingly called Free trade agreements (FTAs) – have been proliferating at an accelerating pace in recent years (given the wide usage of the latter, both terms are used in this volume). In July 2007 there were 380 agreements that had been notified to the World Trade Organization (WTO) (not all had been notified) and it is expected that there will be some 400 in operation by 2010.1 Almost every WTO member is also a member of one or more PTAs. There are PTAs comprising developed countries, developing countries, North–South combinations, near neighbours and distant members, and most countries appear to be either involved in (or preparing for) PTA negotiations. Those who have caught the PTA fever now include several countries that have in the past been staunch supporters of multilateralism, eschewing PTAs as a diversion from the difficult but ultimately productive path of deep and meaningful non-discriminatory trade liberalization through the General Agreement on Tariffs and Trade (GATT)/WTO process. Australia is a notable example. Though it has had a long-standing close bilateral relationship with New Zealand – culminating in the Australia–New Zealand Closer Economic Relations (CER) agreement – until quite recently it was firmly committed to multilateralism as the way to achieve freer trade. In regional fora such as APEC, Australia espoused the so-called open regionalism which was basically a mechanism that aimed to extend any regional trade liberalization to non-members, thereby linking any regional liberalization to the wider goal...