Preferential Trade Agreements: A Law and Economics Analysis

290 Pages·2011·1.56 MB·English

by  Kyle W. Bagwell

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PreferentialTradeAgreements
Thisbookassemblesastellargroupofscholarsandexpertstoexaminepreferential
trade agreements (PTAs), a topic that has repeatedly attracted the interest of ana-
lysts.ItpresentsadiscussionoftheevolvingeconomicanalysisregardingPTAsand
thevariousdysfunctionsthatcontinuallyplacethemamongthepriorityitemsfor
(re)negotiation by the World Trade Organization (WTO). The book explores recent
empiricalresearchthatcastsdoubtontheold“tradediversion”school.Itdebateswhy
theWTOshoulddealwithPTAsandifPTAsbelongunderthemandateoftheWTOas
wenowknowit.
KyleW.BagwellistheDonaldL.LucasProfessorofEconomicsatStanfordUniver-
sity. Professor Bagwell was a reporter for the American Law Institute in its study
“Principles of International Trade: The WTO.” He also serves as a Research Asso-
ciateattheNationalBureauofEconomicResearch(InternationalTradeProgram).
Inhisresearch,ProfessorBagwelluseseconomicanalysistointerpretandevaluate
thedesignoftheWTO.HeisaFellowoftheEconometricSociety.
PetrosC.MavroidisistheEdwinB.ParkerProfessorofLawatColumbiaUniversity.He
alsoservesasProfessorofLawattheUniversityofNeuchaˆtelandisResearchFellow
attheCentreforEconomicPolicyResearch,London.Hespecializesinthelawandthe
WTOandservesastheLegalAdvisortotheWTOintheTechnicalCooperationDivi-
sion,whereheassistsdevelopingcountriesinWTOdisputesettlementproceedings.
HewasalsothechiefcoreporteroftheAmericanLawInstituteproject“Principlesof
InternationalTrade:TheWTO.”

Preferential Trade Agreements
A Law and Economics Analysis
Editedby
KyleW.Bagwell
StanfordUniversity
PetrosC.Mavroidis
ColumbiaUniversity,SchoolofLaw
cambridgeuniversitypress
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Firstpublished2011
PrintedintheUnitedStatesofAmerica
AcatalogrecordforthispublicationisavailablefromtheBritishLibrary.
LibraryofCongressCataloginginPublicationdata
Bagwell,Kyle
Preferentialtradeagreements:alawandeconomicsanalysis/editedbyKyleW.
Bagwell,PetrosC.Mavroidis.
p. cm.
Includesbibliographicalreferencesandindex.
ISBN978-1-107-00033-9(hardback)
1.Commercialtreaties. 2.Tariffpreferences. 3.Foreigntraderegulation.
I.Mavroidis,PetrosC. II.Title.
K4600.B34 2011
382(cid:3).9–dc22 2010041883
ISBN978-1-107-00033-9Hardback
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Contents
Contributors pagevii
Introduction:TheLawandEconomicsofContingentProtection:
AnIntroductiontotheVolume 1
KyleW.BagwellandPetrosC.Mavroidis
1 PreferentialTradingAgreements:FriendorFoe? 7
L.AlanWinters
The“Legalization”ofGATTArticleXXIV–CanFoesBecome
Friends? 31
JamesH.Mathis
2 Third-CountryEffectsofRegionalTradeAgreements 40
CarolineFreund
3 ContingentProtectionRulesinRegionalTradeAgreements 60
ThomasJ.PrusaandRobertTeh
3.1 Commentaryon“ContingentProtectionRulesinRegional
TradeAgreements” 101
DavidA.Gantz
4 TheLimitsofPTAs:WTOLegalRestrictionsontheUseof
WTO-PlusStandardsRegulationinPTAs 115
JoelP.Trachtman
5 EUandU.S.PreferentialTradeAgreements:Deepeningor
WideningofWTOCommitments? 150
HenrikHorn,PetrosC.Mavroidis,andAndre´Sapir
v
vi Contents
StraighteningtheSpaghettiBowl 173
GaryN.Horlick
5.1 Commentson“BeyondtheWTO?CoverageandLegal
InflationinEUandU.S.PreferentialTradeAgreements” 175
NunoLima˜o
6 LaborClausesinEUPreferentialTradeAgreements–AnAnalysis
oftheCotonouPartnershipAgreement 180
JeffKenner
7 DoPTAsActuallyIncreaseParties’ServicesTrade? 210
JuanA.Marchetti
8 AModelArticleXXIV:AreThereRealisticPossibilities
toImproveIt? 233
WilliamJ.Davey
8.1 Commentson“AModelArticleXXIV:AreThereRealistic
PossibilitiestoImproveIt?” 262
T.N.Srinivasan
Index 269
Contributors
KyleW.Bagwell
DonaldL.LucasProfessorofEconomics,StanfordUniversity
WilliamJ.Davey
GuyRaymondJonesChairinLawEmeritus,UniversityofIllinois
CollegeofLaw
CarolineFreund
LeadEconomist,InternationalTradeTeam,DevelopmentResearchGroup,
WorldBank
DavidA.Gantz
SamuelM.FegtlyProfessorofLaw,JamesE.RogersCollegeofLaw,
UniversityofArizona
GaryN.Horlick
AdjunctProfessorofLaw,GeorgetownUniversity;InternationalTradeLawyer,
Washington,D.C.
HenrikHorn
Non-ResidentSeniorFellow,BRUEGEL,Brussels,ProfessorofInternational
Economics;SeniorResearchFellow,ResearchInstituteofIndustrialEconomics,
Stockholm;ResearchFellow,CentreforEconomicPolicyResearch(CEPR),
London
JeffKenner
ProfessorofEuropeanLaw,UniversityofNottingham
NunoLima˜o
AssociateProfessor,DepartmentofEconomics,UniversityofMaryland;
CEPR,NBER
JuanA.Marchetti
Economist,WTO,TradeinServicesDivision
vii
viii Contributors
JamesH.Mathis
AssociateProfessor,DepartmentofInternationalLaw,UniversityofAmsterdam;
ResearchFellow,AmsterdamCenterforInternationalLaw,
TheNetherlands
PetrosC.Mavroidis
EdwinB.ParkerProfessorofForeignandComparativeLaw,Columbia
University,NewYork;ProfessorofLaw,UniversityofNeuchaˆtel,Neuchaˆtel;
ResearchFellow,CEPR,London
ThomasJ.Prusa
ProfessorofEconomics,DepartmentofEconomics,RutgersUniversity,New
Brunswick,NJ
Andre´Sapir
ProfessorofEconomics,SolvayBrusselsSchoolofEconomicsand
Management,Universite´LibredeBruxelles;SeniorFellow,BrusselsEuropean
andGlobalEconomicLaboratory(BRUEGEL);ResearchFellow,CEPR
T.N.Srinivasan
SamuelC.Park,JuniorProfessorofEconomics,YaleUniversity
RobertTeh
WorldTradeOrganization,EconomicsandResearchAnalysisDivision,Geneva,
Switzerland
JoelP.Trachtman
ProfessorofInternationalLaw,TheFletcherSchoolofLawandDiplomacy,Tufts
University
L.AlanWinters
ProfessorofEconomics,DepartmentofEconomics,UniversityofSussex;
ChiefEconomist,DepartmentforInternationalDevelopment,London