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

Authors


  • This paper draws substantially on a study prepared for Bruegel, a European think tank, to whom we are grateful for financial support. A longer version of the paper can be found on Bruegel’s website at http://www.bruegel.org. An earlier version was presented at a seminar held at the Columbia Law School in New York in October 2008. We are grateful for constructive comments to our discussants, Gary Horlick and Nuno Limão, and to Kyle Bagwell, Jagdish Bhagwati and Bernard Hoekman. We are also grateful to participants at seminars held at the European Commission in Brussels and at the WTO in Geneva in February 2009. Comments and helpful criticism from an anonymous referee are gratefully acknowledged. Finally, we are especially indebted for research assistance to Malwina Mejer and also to Vera Squaratti and Anna Wolf.

Abstract

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 to 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, and 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 more enforceable WTO-X provisions than do the EC agreements; (iii) US agreements tend to emphasise regulatory areas more compared to EC agreements.

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