Since time immemorial, trade has substantially influenced human life. Trade enthused intercontinental movements of the Asiatic people, Phoenicians, Egyptians, and other ancient societies. From the ancient “Silk Route” to today's electronic “Silk Road,” rise in intercontinental trade has coincided with the increase in globalization's pace.3 Scholars mark the evolution of the modern trade regime primarily by three eras: first, the introduction of mutually binding tariff reductions; second, the institutionalization of international trade; and third, the expansion of traditional trade obligations to include various new requirements, including a more indirect relationship to trade, and streamlined and effective dispute resolution. Several important elements, such as non-discrimination and multilateralism, characterize global trade governance. Yet it is not a static phenomenon and is certainly not limited to the principles of Most-Favored Nation and National Treatment, or reducing tariff barriers. Multilateralism remains an important stimulant in addressing contemporary challenges, such as reducing trade barriers as a means to stem mercantilist tendencies and further global trade governance. Preferential trade agreements have added a desirable wing to competitive trade liberalization through which more than 50% of today's international trade transpires. Notably, the multilevel global trade governance under the auspices of WTO experienced a gradual increase in its complexity as it evolved. In contrast, deeper and easier integration has been witnessed at regional levels. For example, South Asian countries experimented with the South Asian Association for Regional Cooperation (SAARC) to create regional ripples that parallel bilateral and multilateral currents in an effort to further harness the fruits of participatory governance and trade liberalization. South Asia houses a population of roughly 1.67 billion people, including 40% of the world's poor. Yet, it remains one of the least integrated regions. The conundrums of trade barriers have become vital in global trade governance. The study of eliminating trade barriers in a South Asian milieu illustrates the shortcomings as well as lessons to learn and amend.

Draws on both theory and evaluations of several major Preferential trading arrangements (PTAs) to discuss the constraints to achieving liberalisation in PTAs and key problems facing negotiators trying to achieve the best outcomes within given political economy constraints, such as choice of rules of origin and dispute settlement procedures.

"Essays in this volume were presented originally at a conference organized jointly by the American Enterprise Institute, Washington, D.C., and the Center for International Economics at the University of Maryland at College Park on June 12-13, 1996"--Pref. Includes bibliographical references and index.

The dark side of preferential trade agreements, Rules of Origin (RoO) are used to determine the eligibility of goods to preferential treatment. Ostensibly meant to prevent the trans-shipment of imported products across Free Trade Agreement borders after superficial screwdriver assembly, they act in reality as complex and opaque trade barriers. This book provides evidence strongly suggesting that they do so by intent rather than accidentally—-in other words, that RoOs are policy. Part one draws insights about the effects of RoOs on cross-border trade and outsourcing from recent economic theory. Part two reviews the evidence on RoOs in preferential agreements around the world, putting together the most comprehensive dataset on RoOs to date. Part three explores their "political economy"—-how special interests have shaped them and continue to do so. Part four provides econometric evidence on their costs for exporters and consequent effects on trade flows. Finally, part five explores how they affect trade in the developing world where they spread rapidly and have the potential to do most harm. Beyond the collection of new evidence and its interpretation in light of recent theory, the book's overall message for the policy community is that RoOs are a potentially powerful and new barrier to trade. Rather than being relegated to closed-door technical meetings, their design should hold center-stage in trade negotiations.

Deep trade agreements (DTAs) cover not just trade but additional policy areas, such as international flows of investment and labor and the protection of intellectual property rights and the environment. Their goal is integration beyond trade or deep integration. These agreements matter for economic development. Their rules influence how countries (and hence, the people and firms that live and operate within them) transact, invest, work, and ultimately, develop. Trade and investment regimes determine the extent of economic integration, competition rules affect economic efficiency, intellectual property rights matter for innovation, and environmental and labor rules contribute to environmental and social outcomes. This Handbook provides the tools and data needed to analyze these new dimensions of integration and to assess the content and consequences of DTAs. The Handbook and the accompanying database are the result of collaboration between experts in different policy areas from academia and other international organizations, including the International Trade Centre (ITC), Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), and World Trade Organization (WTO).

Jagdish Bhagwati, the internationally renowned economist who uniquely combines a reputation as the leading scholar of international trade with a substantial presence in public policy on the important issues of the day, shines here a critical light on Preferential Trade Agreements, revealing how the rapid spread of PTAs endangers the world trading system. Numbering by now well over 300, and rapidly increasing, these preferential trade agreements, many taking the form of Free Trade Agreements, have re-created the unhappy situation of the 1930s, when world trade was undermined by discriminatory practices. Whereas this was the result of protectionism in those days, ironically it is a result of misdirected pursuit of free trade via PTAs today. The world trading system is at risk again, the author argues, and the danger is palpable. Writing with his customary wit, panache and elegance, Bhagwati documents the growth of these PTAs, the reasons for their proliferation, and their deplorable consequences which include the near-destruction of the non-discrimination which was at the heart of the postwar trade architecture and its replacement by what he has called the spaghetti bowl of a maze of preferences. Bhagwati also documents how PTAs have undermined the prospects for multilateral freeing of trade, serving as stumbling blocks, instead of building blocks, for the objective of reaching multilateral free trade. In short, Bhagwati cogently demonstrates why PTAs are Termites in the Trading System.