Policy Anchors: Do Free Trade Agreements and WTO Accessions Serve as Vehicles for Developing-country Policy Reform?

The proliferation of bilateral and plurilateral free trade agreements (FTAs1) in recent years has been widely noted. The World Trade Organization (WTO) received notifications of 167 FTAs which entered into force from the beginning of 1990 through July 1, 2005,2 and there may be others. A wide variety of agreements also provide for some integration between members but do not achieve complete free trade in merchandise. Some of these FTAs pair a large developed-country partner with a developing-country partner. Beginning in 2000, the U.S. has initiated FTA negotiations with 23 different countries in 12 separate agreements, and concluded negotiations with 13 of those countries. Similarly, in 2004 ten countries acceded to the EU, expanding its membership to 25. At the time of writing (November 2005), another eight countries are in the queue for EU Membership,3 and the EU has a wide variety of additional agreements, including FTAs with Chile, Mexico, and South Africa and various sorts of arrangements with its regional neighbors under the umbrellas of the “European Neighbourhood Policy” and “Euro-Mediterranean Partnership.”