Regional Trade Agreements: Law, Policy and Practice.

AuthorZamora, Stephen
PositionBook review

REGIONAL TRADE AGREEMENTS: LAW, POLICY AND PRACTICE. BY DAVID A. GANTZ. 2009, CAROLINA ACADEMIC PRESS. PP. XXVI, 507.

Before embarking on a review of David Gantz's excellent new book, Regional Trade Agreements: Law, Policy and Practice [hereinafter Regional Trade Agreements], (1) I should confess that I am not a great fan of free trade agreements (FTAs). Despite having published articles on the North American Free Trade Agreement (NAFTA), and although I have served as a panel arbitrator in the first case presented under the governmental dispute provisions under NAFTA Chapter 20, (2) I lack enthusiasm for the "FTA Movement" that is so effectively described and analyzed by Professor Gantz. (3) My lack of enthusiasm for FTAs grows out of the education I received as a young lawyer in the early 1970s, during which I readily embraced two shibboleths of the Bretton Woods System: (4) the need to dismantle trade and other barriers in order to promote economic growth worldwide, and the desire to carry out this dismantling by multilateral, rather than regional or local, means. This orthodoxy, preached by such eminent and persuasive advocates as Georgetown University's Professor John H. Jackson (5) and Columbia University's Jagdish Bhagwati, (6) was very convincing to a young student of international economic law. Actively promoted by the Western (i.e., non-Soviet) economic powers, the global, multilateral approach to trade liberalization--led by efforts initiated under the General Agreement on Tariffs and Trade (GATT)--resulted in an unprecedented expansion of global trade, setting the stage for the era of globalization that we are now experiencing. (7)

Over time, the challenge of promoting trade liberalization increased, as governments imposed complex webs of non-tariff barriers, and as stubborn protectionist obstacles resisted liberalization during successive GATT trade rounds. (8) As David Gantz points out, the consolidation of the European Union in the 1980s, coupled with frustration over the lack of progress within the multilateral negotiations of the GATT, led the United States to seek a new approach--to promote regional solutions through FTAs--as a more realistic avenue towards trade liberalization compared to the global, multilateral trade negotiation rounds sponsored by the GATT. (9) This new policy coincided with U.S. foreign policy under President George W. Bush, which was intent on rewarding U.S. allies in the war on terrorism with offers of trade advantages gained through increased access to U.S. markets through free trade agreements. (10) This piecemeal, regional approach also permitted the United States to add rules to the trade agenda to accomplish several long-standing goals: the adoption of international rules to promote and protect foreign investment, and the adoption of rules governing trade in services, which were not added to the GATT agenda until the entry into force of the Uruguay Round Agreements and the formation of the World Trade Organization (WTO) in 1995. (11)

The impulse to adopt FTAs has thus advanced the jurisdiction of what used to be referred to as the international trade regime. The term "Free Trade Agreement" is a misnomer--used to signify NAFTA, the most important FTA to which the United States is a party, as well as most of the FTAs adopted by the United States--the U.S. model FTA includes rules governing investment, intellectual property protection, trade in services, environmental protection, and other subjects. (12)

Free trade agreements have thus become important tools in U.S. foreign policy, underscoring the geopolitical implications of FTAs and RTAs, which are barely mentioned, but are certainly recognized by Gantz. (13) I consider NAFTA to be not just a trade agreement, but rather a relationship agreement--an important, albeit tentative, strategic step in the development of a structure to manage a permanent relationship among North America's three largest nations. NAFTA's value must be assessed under this broader perspective.

Unfortunately, while FTAs may increase trade between nations, the increase comes at a price. Gantz's text points out how FTAs complicate international trade, by creating a...

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