HOW IMPORTANT ARE “DEEP” TRADE AGREEMENTS?

Trade agreements, comprising (FTAs) and preferential trade agreements (PTAs), have expanded in terms of numbers and complexity.

- PROF DR EVELYN S. DEVADASON

The astounding growth of bilateral trade agreements (BTAs), regional trade agreements (RTAs) and cross-regional trade agreements (CRTs) has sparked conversations on whether multilateral trade is approaching its end. FTAs, recognizably, are an alternative avenue to pursue trade liberalization in the advent of stalled multilateral negotiations.

Instead of debating on the future of multilateralism, the focus should be on the content of these FTAs, which have evolved significantly to establish new trade rules on emerging issues.

To reflect new forms of trade engagement or rather the way in which businesses are conducted today, recent FTAs contain dedicated (or standalone) e-commerce chapters. Among the most consequential of e-commerce chapters are provisions related to nondiscrimination and market access, e-commerce enablers and paperless trading, users’ protection, and cross-border data flows.

Singapore, Chile, and New Zealand have taken a further step in digital trade negotiations to sign the first of its kind “digital-only deal” agreement, the Digital Economy Partnership Agreement (DEPA) on 12 June 2020 (which entered into force on 28 December 2020).

Another provision that has gained traction in FTAs is the chapter related to trade and sustainable development (TSD), comprising labour and environmental provisions. The sustainability agenda in fact made its way into FTAs, mainly because it is easier to reach a consensus on such sensitive issues with greater depth and wider scope within a limited number of participants, than would be possible in the multilateral context.

To date, approximately 29% of the total global RTAs in force include labour provisions.