Templates for trade: change, persistence and path dependence in U.S. and EU preferential trade agreements

Abstract

Over the last two decades, Preferential Trade Agreements (PTAs) proliferated through the international trading system. PTAs created a web of rules paralleling and extending the system of the World Trade Organization (WTO). PTAs are an increasingly dominant feature of the international trading system, adding to a steadily increasing complexity. Their content is rarely studied systematically across agreements, and the mechanisms leading to their genesis are little understood. It is typically assumed that actors like the European Union (EU) and the United States (U. S.) work off a template when negotiating PTAs. Some argue that this allows them, amongst others, to impose a regulatory regime. This working paper attempts to put this claim to the test. Using diffusion theory as framework, it analyzes PTAs signed by the EU, the U. S. and their regional trading partners. Understanding the use of templates will help negotiating parties to assess the margin of maneuver when negotiating PTAs with the EU and the U. S. as well as the rigidity of their mandate. The analysis is conducted on a regional and a domestic level using aggregated data on PTA content and a qualitative assessment of selected PTA provisions (anti-corruption, environment and cultural cooperation). The study finds that the flexibility of these mandates is considerable and that templates, if used at all, can change substantially over time.