Catalog

	Table of Contents
p. 62 of 81 BACK | NEXT I. Developing Asia and the World II. Economic Trends and Prospects in Developing Asia III. Preferential Trade Agreements in Asia and the Pacific Overview Trends in Trade and the Expansion of PTAs: Trends in World and Asian Trade Flows Diversity in of PTAs Origins of PTAs Institutional Characteristics of PTAs PTAs as Mechanisms for Regional Cooperation Asia and Pacific PTAs and the World Trade Organization Income Characteristics of PTAs Overlapping Memberships in PTAs and Multilateral Trading Arrangements The Economic and Broader Effects of PTAS: Theoretical Arguments Effects of PTAs on Trade in Asia and the Pacific: Some Evidence Conclusions References

Asian Development Outlook 2002 : III. Preferential Trade Agreements in Asia and the Pacific : Diversity in of PTAs

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Institutional Characteristics of PTAs

PTAs in Asia and the Pacific are more loosely institutionalized than those in Europe, Latin America, or North America (Table 3.5). There are no customs unions in the region, thus there is no need to negotiate a common external tariff structure. Dispute settlement mechanisms tend to be based on bilateral negotiations, with some provisions for resolution of disagreements. Much of the implementation of the PTA regulations, such as application of rules of origin, takes place subnationally according to commonly agreed standards. The political history of the PTAs also partly explains the lack of accompanying institutions. The two PTAs that are offshoots of larger organizations (AFTA and SAPTA) do not require much additional institutional structure to administer themselves. CER is a bilateral agreement so that administration does not require strong supranational agreements. APEC, the largest trading arrangement in which DMCs are involved, has few institutional structures, in keeping with its overall philosophy of loose cooperation and open agreements.

The European PTAs, in contrast, involve substantial international institutionalization. The EU has a powerful commission to oversee a wide range of common market policies.

The Latin American PTAs, particularly the customs unions of the Andean Pact and Mercosur, have intermediate levels of institutionalization. The Andean Pact is modeled on the EU and has some of the same permanent institutional elements. The Andean Court of Justice is unusual, as most PTAs specify bilateral negotiations as the primary means of dispute settlement. Mercosur’s trade commission, a multilateral body that resolves disputes only after negotiations have reached an impasse, is a more common institutional format. NAFTA involves the least supranational institutionalization of the agreements in the Americas.

There are several PTAs that stand out with respect to nontrade provisions. Mercosur’s attention to democracy is unusual, while NAFTA’s provisions for labor and environmental regulation are also uncommon.

Most PTAs involving DMCs have provisions for trade facilitation and investment policy. SAPTA is an exception, as additional nontariff measures, such as trade facilitation and investment cooperation, are deemed priorities, although member governments have not formally agreed on such additional measures. Liberalization of trade in services among SAPTA members is also on the agenda. SPARTECA, mainly focused on providing market access as a kind of development aid, has no provisions beyond those for trade.

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