ABSTRACT
Preferential trade agreements (PTAs), of which TTIP is but a recent incarnation, are not as ‘preferential’ as they used to be. Traditional PTAs mainly exchanged ‘club goods’, that is goods or tariff concessions that are ‘non-rivalrous’ (use by one does not diminish their availability to others) but ‘excludable’ (some can be excluded from use). Modern PTAs are increasingly providing ‘public goods’, i.e. goods or concessions that are ‘non-rivalrous’ and ‘non-excludable’: they are available to everyone irrespective of whether one contributed to producing the good (Olson 1965, Bodansky 2012: 652). More precisely, whereas most commitments in traditional PTAs (tariff concessions) were exclusive to PTA partners, many commitments in twenty-first-century PTAs are either de facto or de jure extended on a most-favoured nation (MFN) basis to outsiders too, often unconditionally, sometimes conditionally. This chapter explains why this is the case with reference to recent US and EU PTAs, especially those with South Korea. It also offers some thoughts on what this means for the global trading system and the WTO moving forward.
