DP7317 Beyond the WTO? An Anatomy of EU and US Preferential Trade Agreements

Author(s): Henrik Horn , Petros C Mavroidis , André Sapir

Publication Date: June 2009

Keyword(s): enforceable , legal inflation , Preferential trading agreements

JEL(s): F13 , F15 , K33

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP7317.asp.asp

It is often alleged that PTAs involving the EC and the US include a significant number of obligations in areas not currently covered by the WTO Agreement, such as investment protection, competition policy, labour standards and environmental protection. The primary purpose of this study is highlight the extent to which these claims are true. The study divides the contents of all PTAs involving the EC and the US currently notified to the WTO, into 14 "WTO+" and 38 "WTO-X" areas, where WTO+ provisions come under the current mandate of the WTO, and WTO-X provisions deal with issues lying outside the current WTO mandate. As a second step, the legal enforceability of each obligation is evaluated, judged on the extent to which the text specifies clear obligations. Among the findings are: (i) EC agreements contain almost four times as many instances of WTO-X provisions as do US agreements; (ii) but EC agreements evidence a very significant amount of ‘legal inflation’ (i.e., non-legally enforceable provisions) in the WTO-X category, and US agreements actually contain a more of enforceable WTO-X provisions than do the EC agreements; and (iii) US agreements tend to emphasize regulatory areas more compared to EC agreements.