New CEPR/World Bank eBook on 'The Economics of Deep Trade Agreements'
While multilateral trade negotiations have stagnated, regional trade agreements have proliferated. According to a new book from the Centre for Economic Policy Research (CEPR) and the World Bank, this new generation of trade agreements aims to achieve much deeper integration of the economies of participating countries, with a positive effect on growth and development. But they also risk leading to greater fragmentation in the world economy. The editors conclude that a revival of meaningful multilateralism is essential to complement these ‘deep trade agreements’ in a post-COVID-19 world.
The contributors to the new volume note that the nature of international trade is changing. In an environment of growing tensions between global powers and stagnation in multilateral negotiations, the onus has shifted increasingly to bilateral and regional agreements. This shift is redefining the complexities of trade agreements, which no longer focus predominantly or exclusively on international trade flows, but affect a range of other policy areas, such as the international flows of investment and labour, and the protection of intellectual property rights and the environment. Known as deep trade agreements (DTAs), their goal is integration beyond trade – deep integration.
The new CEPR/World Bank eBook analyses what this means for the future of global trade and shows how DTAs are fundamentally different from the previous generation of trade agreements. It shows that the rules and commitments contained in deep trade agreements are important for economic development as they influence international trade patterns, global value chain integration, and welfare.
What is clear is that close attention to the content of DTAs is essential for analysts and policymakers — the devil is in the details. The commitments and obligations associated with these trade agreements will have significant consequences for the world economy.
You can also read a VoxEU column here.