Preferential Trade Agreements in Asia and the Pacific 157 Preferential Trade Agreements in Asia and the Pacific

Global multilateral trading arrangements offer the best prospect for reducing barriers to trade and achieving the greatest gains from trade liberalization. Preferential trade agreements (PTAs) are a second-best means of achieving trade liberalization in a context where multilateral negotiations proceed slowly. There is considerable variation in the efforts undertaken by PTAs in different parts of the world. As institutions for international cooperation, PTAs in the Asia and Pacific region are relatively advanced and have served as vehicles for fostering regional cooperation in other economic and non-economic issues, though they have been less active than PTAs in other regions in altering tariffs. The diversity of PTAs highlights the need to avoid discussing them in general terms, and greater nuance in their portrayal can aid in understanding the types of PTAs that can serve as useful components of a multitiered international trading system. Empirical research shows that PTAs have generally increased trade both among members and between members and nonmembers, but also supports the conclusion that the effects of PTAs vary significantly, depending upon their particular institutional characteristics.