International Political Economy of Preferential Trade Agreements

Abstract

The change in the concept of globalization of the world economy has led to serious structural changes in the global governance of international trade, as well as in the theory and practice of organizing preferential trade agreements (PTAs) between countries. At all stages of economic globalization, the main motive for the creation of the PTS was the expansion of access to foreign markets. The period of slowbalization of the world economy after the global crisis of 2008–2009 led to a further increase in trade protectionism. The role of traditional determinants in the creation of PTAs is decreasing, while the lobbying activity of exporters – transnational companies – is becoming more significant, which leads to an increase in the unevenness of benefits received by participants in international exchange. The focus of the international political economy of the PTA is shifting from traditional tariff and non-tariff trade barriers to the study of the conditions for cross-border investment, rules for the protection of intellectual property, environmental issues, and production standards. The multidimensionality of trade policy at the present stage dictates the need to revise the preferences prevailing in international trade. Trade policy covers not only cross-border exchange, but also international production. Modern PTAs are an alternative design to the WTO multilateral trade regulation, which will simplify traditional international exchange procedures. In addition, in the PTAs, some aspects of competition rules that are poorly spelled out in the WTO may be especially significant, since the risks of collusion of firms in this case may already cover several jurisdictions. An important role in understanding the political and economic nature of PTAs is played by their “distributional” consequences, when the gains of different countries from participation in the PTAs becomes uneven, which is a serious challenge for real economic integration between countries. To develop new approaches to organizing PTAs requires a clear understanding of the new nature and scale of economic globalization. Therefore, in the coming years, we will face the transformation of the designs of the already created PTAs, taking into account the new challenges that have emerged in international trade.