The World Trade Organizations has published this report which is divided into four main parts. The first provides an historical analysis of preferential trade agreements (PTAs) and a description of the current landscape. It documents the large increase in PTA activity in recent years, breaking this down by region, level of economic development, and type of integration agreement. It provides a precise estimate of how much trade in PTAs receives preferential treatment.

 

The second section discusses the causes and consequences of PTAs, focusing on both economic and political factors. A distinction is made between shallow and deep integration in order to suggest that traditional theories do not fully explain the emerging pattern of PTAs. The report examines in particular the role of international production networks in prompting the creation of deep PTAs.

 

The third section focuses on the policy content of PTAs, with particular reference to the depth and scope of commitments compared with those contained in the WTO agreements. It supports the link between production networks and PTAs with both statistical evidence and case studies.

 

The final section identifies areas of synergies and potential conflicts between PTAs and the multilateral trading system and examines ways in which the two “trade systems” can be made more coherent.