4 Preferential trade agreements
Preferential trade agreements (PTAs) are treaties between two or more countries granting preferential market access to each other’s markets. PTAs may be bilateral, regional, or cross-regional. PTAs have proliferated rapidly in recent years. Since 1948, 474 PTAs have been notified to the GATT/WTO, amongst which over 350 have been notified since 1990. In 1990, the WTO had an average of two PTA partners, but this has increased to twelve in the past two decades. Today, there are approximately 300 PTAs in force, of which most are bilateral, involving only two countries. Most of these are free trade agreements; few customs unions have formed. PTAs increasingly involve developing countries, whether in north-south or south-south agreements. In the late 1970s, the vast majority of PTAs involved developed countries – 60 per cent of PTAs were between developed and developing countries and 30 per cent between developed countries only. This has changed dramatically. Today, approximately two-thirds of PTAs in force are between developing countries, while only one quarter include both developed and developing countries, and only 10 per cent are between developed countries. In addition, cross-regional PTAs are increasingly common, comprising half of all PTAs in force. Finally, PTAs covering trade in goods are more common than those covering trade in services, but this tendency is becoming less pronounced. Less than 1 per cent of PTAs address only trade in services, but the proportion of PTAs addressing both trade in goods and services has more than doubled between 2000 and 2010, reaching 31 per...
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