Reassessing North-South Relations: An Examination of North-South Preferential Trade Agreements for Developing and Emerging Economies

The rapid proliferation of North-South preferential trade agreements (PTAs) during the last quarter century has had broad implications for developing and emerging economies. As a result of North-South power asymmetries and the aggressive trade policy that has been characterized as ‘competitive liberalization,’ it has been argued that these agreements have produced asymmetric results in favor of Northern countries. This thesis advances a novel approach in the assessment of North-South preferential trade relations that goes beyond the simplistic interpretation of North-South trade politics as a phenomenon largely dominated by North-South power asymmetries. By acknowledging that not all North-South PTAs have the same characteristics, this thesis divides North-South PTAs into two sequential categories: first-order, i.e., Southern countries’ first North-South PTAs and second-order, i.e., Southern countries’ subsequent North-South PTAs. The thesis argues that, while first-order North-South PTA negotiations can produce asymmetric outcomes in favor of Northern countries because they have the ability to exert discriminative pressure on Southern countries, second-order North-South PTA negotiations follow a different logic. Having secured preferential access to Northern markets through first-order PTAs, Southern countries become immune to competitive pressures and can themselves exert discriminative pressure on Northern countries during second-order negotiations. The thesis examines the North-South PTA negotiations of Mexico, Chile, Korea, Colombia, and Peru, five countries of the Global South that have been especially active in North-South preferential trade. Based on the author’s personal interviews with EU and US trade officials and primary and secondary sources, this thesis conducts process tracing to account for the process of the five Southern countries’ first-order and second-order North-South PTA negotiations and reveal the impact of first-order North-South PTAs on the bargaining powers of Southern countries in second-order negotiations and hence the outcomes of second-order agreements. The thesis concludes that, albeit to varying extents, first-order agreements improve the bargaining powers of Southern countries in second-order North-South trade negotiations.