The Asia-Pacific region continues to be the largest contributor to the worldwide build-up of preferential trade agreements (PTAs), accounting for about half of PTAs worldwide. PTAs have become bigger, deeper, more digital and increasingly supportive of sustainable development, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) exemplifying these trends.
The noodle-bowl of Asia-Pacific trade agreements now comprises 333 PTAs with at least one party of the Asia-Pacific. Of those, 202 are in force, 21 have been signed and are pending ratification, and 96 are still under negotiation. Between January 2022 and October 2022 alone, eight new PTAs were signed, and six PTAs were under negotiation.
Trade among PTA partners now accounts for about half of all trade by Asia and the Pacific economies, reflecting the fact that the economies increasingly sign agreements with partners outside the region (54 per cent). Trade covered by PTA partners varies considerably across the subregions. Central Asian economies and South Pacific islands are less engaged than economies of other subregions in recent PTAs.
Fifty-three per cent of in-force PTAs now go beyond liberalization of trade in goods, including addressing issues related to digital and sustainable development. The most common policy areas in Asia-Pacific PTAs outside preferential tariffs are ‘trade facilitation and customs cooperation’ followed by ‘competition policy’, and ‘intellectual property’, all now found in more than 50 per cent of the signed and enforced PTAs.
The Asia-Pacific region now has 81 signed and in-force PTAs featuring e-commerce chapters or provisions. A new type of stand-alone ‘digital trade agreement’ (DTA) or ‘digital economy agreement’ has also emerged following the Japan-United States of America DTA that was enforced in 2020. The number of DTAs has grown since then, which has raised concerns about a possible new ‘digital noodle bowl’.
Sustainable development is a broad concept and covers a wide range of economic, social and environmental issues, as reflected in the 17 Sustainable Development Goals (SDGs). As of October 2022, 127 of 223 signed and enforced PTAs had sustainable development-related provisions, including provisions related to labour protection, human rights, gender, health, environment and SMEs.