World Trade Report 2011

The WTO and Preferential Trade Agreements: From Co-Existence to Coherence

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The ever-growing number of preferential trade agreements (PTAs) is a prominent feature of international trade. The World Trade Report 2011 describes the historical development of PTAs and the current landscape of agreements. It examines why PTAs are established, their economic effects, and the contents of the agreements themselves. Finally it considers the interaction between PTAs and the multilateral trading system. Accumulated trade opening - at the multilateral, regional and unilateral level - has reduced the scope for offering preferential tariffs under PTAs. As a result, only a small fraction of global merchandise trade receives preferences and preferential tariffs are becoming less important in PTAs. The report reveals that more and more PTAs are going beyond preferential tariffs, with numerous non-tariff areas of a regulatory nature being included in the agreements. Global production networks may be prompting the emergence of these "deep" PTAs as good governance on a range of regulatory areas is far more important to these networks than further reductions in already low tariffs. Econometric evidence and case studies support this link between production networks and deep PTAs.

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The World Trade Report 2011 was prepared under the general direction of the Deputy Director-General Alejandro Jara and supervised by Patrick Low, Director of the Economic Research and Statistics Division. The writing of this year’s report was coordinated by Nadia Rocha and Robert Teh. The principal authors of the Report were Marc Bacchetta, Cosimo Beverelli, John Hancock, Alexander Keck, Gaurav Nayyar, Coleman Nee, Roberta Piermartini, Nadia Rocha, Martin Roy, Michele Ruta, Robert Teh and Alan Yanovich. Other written contributions were provided by Marc Auboin, Manfred Elsig, Trudi Hartzenberg and Roy Santana. Special acknowledgment is owed to Richard Baldwin for his many suggestions and contributions to the report. Trade statistics information was provided by the Statistics Group of the Economic Research and Statistics Division, coordinated by Hubert Escaith, Julia de Verteuil, Andreas Maurer and Jurgen Richtering. Aishah Colautti assisted in the preparation of the graphical input and Paulette Planchette, assisted by Véronique Bernard, prepared the bibliography. Research assistance was provided by Hans Baumgarten, Pavel Chakraborty, Claudia Hofmann, Joelle Latina, Alen Mulabdic, Andreas Lendle, and Gianluca Orefice.

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