Report: A New Trade Policy Landscape: Mapping trade-related agreements

This report maps and analyses a certain type of trade cooperation that is taking place outside of formal trade policy. We call this form of cooperation ‘trade-related agreements’ (TRAs), the scope of which differs from previously established terms like ‘mini deals’. In this report, we describe and define these trade-related agreements and discuss potential challenges and benefits.

Currently, it has become more challenging to conclude both multilateral trade agreements and free trade agreements (FTAs). Thus, discussions regarding alternative platforms (e.g. mini deals) and what the future holds for trade policy have started to emerge. This prompted us to investigate trade cooperation that is taking place outside the multilateral trading system and FTAs.

A trade-related agreement aims at increasing cooperation with trade as a tool

We use the term trade-related agreements (TRAs), which are agreements between two or more countries where one of the objectives is to increase cooperation at least in part through trade, but without an explicit focus on improving market access by reducing tariffs. In this report, we identify and analyse 114 trade-related agreements, encompassing 50 different countries.

These agreements are mapped into four thematic areas of cooperation: horizontal, digital, resilience-focused and ‘green’.

Potential benefits and challenges identified

Or analysis shows that there are both potential benefits and challenges associated with trade-related agreements.

Potential benefits

  • Flexibility: Trade-related agreements offer not only legal flexibility, making it easier for countries to establish agreements without the lengthy ratification processes typical of legally binding agreements, but their structure also enables partners to agree on detailed provisions that might not always be possible in FTAs or multilateral agreements.
  • Building trust: Trade-related agreements can build trust between trading partners, potentially laying the groundwork for future FTAs.
  • Possible complement to FTAs: FTAs and trade-related agreements typically have different purposes and are therefore not mutually exclusive. Since trade-related agreements allow countries to address specific trade issues or sectors, such as supply chain resilience or critical minerals, it is possible for them to complement FTAs.

Challenges

  • Lack of transparency: Many trade-related agreements are not publicly accessible, making it difficult for industries and stakeholders to fully understand or benefit from the agreements.
  • Uncertain impact: The long-term trade effects of trade-related agreements are still unclear, and there is little data available to evaluate their effectiveness.
  • Legal ambiguity: The non-binding nature of trade-related agreements raises questions about their enforceability and legal legitimacy, especially in cases where national parliaments are bypassed in their approval.
  • Possible exclusion: Trade-related agreements are less inclusive than multilateral agreements, which entails a risk that developing countries are partly or entirely excluded from trade-related agreements as developing countries might not have the same resources to negotiate trade-related agreements as developed countries have.

Recommendations to unlock the potential of trade-related agreements

Increase transparency: Governments should make the texts of the trade-related agreement publicly available to allow businesses and stakeholders to leverage their benefits and hold governments accountable to their commitments.

Monitoring by WTO or other bodies: An international organisation like the WTO could help monitor trade-related agreements to increase the transparency of the agreements, which could in turn prevent regulatory overlaps, duplications and conflicts.

Inclusivity: Trade-related agreements should be open to all interested countries, especially developing countries, to ensure a more equitable and less fragmented global trade system.

In conclusion, while trade-related agreements are not a replacement for FTAs or multilateral trade agreements, they can provide solutions to address specific trade issues and foster cooperation. However, their effectiveness and long-term impact on trade need further analysis and transparency for their full potential to be realised.

The compiled information on the TRAs as an Excel file

If you would like access to the Excel file containing the information and classification of the 114 trade-related agreements (annex 1 in the report), please contact our registry clerk.

What is the National Board of Trade Sweden?

The National Board of Trade is the Swedish government agency for international trade, the EU internal market and trade policy. Our mission is to facilitate free and open trade with transparent rules as well as free movement in the EU internal market. We provide the Swedish Government with independent analyses, reports and policy recommendations and take into account the views of businesses of all sizes in international trade policy-related matters.