Preferential Trade Agreements and the World Trade System: A Multilateralist View

Pravin Krishna

NBER Working Paper No. 17840
Issued in February 2012
NBER Program(s):   ITI

This paper reviews recent developments in international trade to evaluate several arguments concerning the merits of preferential trade agreements (PTAs) and their place in the world trade system. Taking a multilateralist perspective, it makes several points: First, despite the proliferation of PTAs in recent years, the actual amount of liberalization that has been achieved through PTAs is actually quite limited. Second, at least a few studies point to significant trade diversion in the context of particular PTAs and thus serve as a cautionary note against casual dismissals of trade diversion as a merely theoretical concern. Equally, adverse effects on the terms-of-trade of non-member countries have also been found in the literature. Third, while the literature has found mixed results on the question of whether tariff preferences help or hurt multilateral liberalization, the picture is different with the more elastic tools of trade policy, such as antidumping duties (ADs); the use of ADs against non-members appears to have dramatically increased while the use of ADs against partner countries within PTAs has fallen. Fourth, despite the rapid expansion of preferences in trade, intra-PTA trade shares are relatively small for most PTAs; multilateral remain relevant to most member countries of the WTO.

download in pdf format
   (318 K)

email paper

This paper is available as PDF (318 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17840

Published: Preferential Trade Agreements and the World Trade System: A Multilateralist View, Pravin Krishna. in Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, Feenstra and Taylor. 2014

Users who downloaded this paper also downloaded these:
Whalley Why Do Countries Seek Regional Trade Agreements?
Dee and Gali The Trade and Investment Effects of Preferential Trading Arrangements
Krishna Preferential Trade Agreements and the World Trade System: A Multilateralist View
Eaton, Kortum, and Sotelo w17864 International Trade: Linking Micro and Macro
Svensson w17823 Practical Monetary Policy: Examples from Sweden and the United States
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us