Eliminating Trade Barriers through Preferential Trade Agreements: Perspectives from South Asia

Abstract

Since time immemorial, trade has substantially influenced human life. Trade enthused
intercontinental movements of the Asiatic people, Phoenicians, Egyptians, and other ancient
societies. From the ancient “Silk Route” to today’s electronic “Silk Road,” rise in intercontinental
trade has coincided with the increase in globalization’s pace.3 Scholars mark the evolution of the
modern trade regime primarily by three eras: first, the introduction of mutually binding tariff
reductions; second, the institutionalization of international trade; and third, the expansion of
traditional trade obligations to include various new requirements, including a more indirect
relationship to trade, and streamlined and effective dispute resolution.
Several important elements, such as non-discrimination and multilateralism, characterize
global trade governance. Yet it is not a static phenomenon and is certainly not limited to the
principles of Most-Favored Nation and National Treatment, or reducing tariff barriers.
Multilateralism remains an important stimulant in addressing contemporary challenges, such as
reducing trade barriers as a means to stem mercantilist tendencies and further global trade
governance.
Preferential trade agreements have added a desirable wing to competitive trade liberalization
through which more than 50% of today’s international trade transpires. Notably, the multilevel
global trade governance under the auspices of WTO experienced a gradual increase in its
complexity as it evolved. In contrast, deeper and easier integration has been witnessed at regional
levels. For example, South Asian countries experimented with the South Asian Association for
Regional Cooperation (SAARC) to create regional ripples that parallel bilateral and multilateral
currents in an effort to further harness the fruits of participatory governance and trade
liberalization. South Asia houses a population of roughly 1.67 billion people, including 40% of the
world’s poor. Yet, it remains one of the least integrated regions. The conundrums of trade barriers
have become vital in global trade governance. The study of eliminating trade barriers in a South
Asian milieu illustrates the shortcomings as well as lessons to learn and amend.