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  • Cited by 2
  • Print publication year: 2008
  • Online publication date: September 2009

3 - The race towards preferential trade agreements in services: How much market access is really achieved?

from PART 2 - Unexplored economic, political and judicial dimensions of GATS


Economists recognise that multilateral liberalisation is superior to preferential trade deals, which can distort trade and create costs, especially for non-parties. Despite the different characteristics of trade in goods and trade in services, the same basic conclusion applies. Nevertheless, the view that preferential agreements carry no or limited downsides is often expressed – even for those preferential agreements that are not part of a broader regional integration effort. It is sometimes pointed out that preferential liberalisation, especially as regards newer areas such as services, is better than no liberalisation at all and that the process of preferential liberalisation would largely ‘multilateralise’ itself: first, those not party to these preferential arrangements (especially with larger markets such as the US) would want to take part so as not be left behind; second, those countries having made reforms as part of preferential deals would find it easier to undertake liberalisation commitments at the WTO. Such views often find echo in the US, where the expression ‘competitive liberalisation’ has been coined to describe the recent turn of the US towards bilateral free trade agreements.

The number of preferential trade agreements (PTAs) signed by the US in the last few years, together with the number of countries that have engaged in PTA discussions with the US or expressed interest in doing so, suggest that the competition aspect seems at play.

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