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Preferential Trade Agreements: The Wrong Road, Jagdish N. Bhagwati

Faculty Scholarship

The nature of FTAs is to offer free trade only to members, not to non-members. Thus, FTAs are two-faced: they ensure free trade for members and (relative) protection against non-members. First-year students of international economics would be asked to shift to a different field if they could not grasp this elementary and elemental distinction, and yet today's politicians imagine themselves to be statesmen endorsing free trade when they embrace these inherently discriminatory PTAs.

As PTAs proliferate, the main problem that arises is the accompanying proliferation of discrimination in market access and a whole maze of trade duties and barriers that …

The Theory Of Preferential Trade Agreements: Historical Evolution And Current Trends, Jagdish N. Bhagwati, Arvind Panagariya

Faculty Scholarship

The theory of preferential trade agreements (Pf A's), or what might be described in policy terms as the General Agreement on Tariffs and Trade (GATT) Article XXIV sanctioned freetrade areas (FTA's) and Customs Unions (CU's), has undergone two phases of evolution, in two very different modes, largely reflecting the contrasting policy concerns of the time. In this paper, we trace this evolution, offering both a historical context and an intellectual coherence to diverse analytical approaches.