Credible Commitment through PTAs and their Effects on Trade: A Study of Asia’s Reciprocal Trade Agreements.” Working Paper

Preferential Trade Agreements (PTAs) have proliferated rapidly in Asia in recent years, an unprecedented phenomenon in a region in which state-led institution-building efforts were largely unsuccessful during the Cold War years. Nevertheless, the formation of trade agreements in the region is consistent with global trends, and it is in the larger context of debate on whether such agreements constitute "building blocks " or "stumbling blocks " to multilateral trade liberalization that this paper examines the qualitative aspects of these institutional mechanisms and their impact on trade flows. In the scholarly community, research on PTAs has expanded tremendously over the last decade, reflecting the proliferation of trade agreements worldwide. By and large, however, this literature has tended to treat PTAs as homogenous in both their effects and their provisions. While some recent research has examined PTAs in terms of credible commitment, these studies have focused on specific aspects of PTAs such as dispute settlement mechanisms or escape clauses. In this paper, we investigate the provisions of reciprocal trade agreements (RTAs) in Asia, focusing our attention on those agreements that are professedly geared toward trade liberalization through reciprocal exchanges of trade concessions