Preferential Trade Agreements: Liberalizing Heroes or Little Monsters?

After the breakdown of WTO Doha Round negotiations this summer, some economists -- including IIE’s Fred Bergsten - are advocating the pursuit of regional or preferential trade agreements (PTAs) to further free trade while the WTO is stalled.I asked Ernesto Zedillo, President of Mexico during the early years of NAFTA implementation, head of the United Nations Millennium Project's work on trade, and now head of the Yale Center for the Study of Globalization, his views on "competitive liberalization" through regional trade agreements now that the Doha round is faltering. He responded:

"Every additional PTA will become one more obstacle to the universal and non-discriminatory trade liberalization that the world needs. PTAs have been more easily hijacked by special interests groups and are not resulting in really good instruments. NAFTA was pre WTO and was really an opportunity for Canada to get rid of some wrong things that they had got in the early FTA with the US. The sheer size of Canada-Mexico together and the wisdom of the first President Bush and President Clinton Administrations permitted a deal that became a positive force to conclude the Uruguay round. But that was a long time ago and the present deals are little monsters that will be much regretted in the future."