Sixty-two percent of the 162 preferential trade agreements (PTAs) signed between 1945 and 1989, and 81 percent of the 654 post-1990 PTAs, include at least one clause on a non-trade issue (NTI). Using a novel dataset that covers 262 data points on NTIs in 644 PTAs,shows three major trends of NTIs in trade deals: first, the NTIs agenda is broadening, with ever more aspects included in trade agreements. Modern PTAs move beyond clauses on national security, a general call on environmental protection, and labor rights. Instead, these progressive agreements cover aspects ranging from gender to waste management, to the fight against terrorism. Second, the style of regulating such issues converges. No longer are there different approaches to deal with NTIs in PTAs. Now, the gold standards seem to be the installation of a court system dealing with potential NTI violation and combining this with a formal dialog between policy makers and domestic stakeholders on NTIs. Third, developing countries have been catching up and increasingly commit to NTIs. The proliferation of NTIs in PTAs is likely to continue, where societal pressure is prone to push this process even further.

Preferential trade agreements (PTAs) cover a much wider diversity of environmental clauses than World Trade Organization (WTO) agreements. Which PTA environmental clauses could be multilateralized and included in the WTO rulebook? This chapter compares five different scenarios for the potential multilateralization of PTA environmental clauses: (1) The “routine scenario” combines the most frequent clauses, (2) the “consensual scenario” includes the clauses accepted by a high number of WTO members, (3) the “trendy scenario” includes the most popular clauses in recent times, (4) “the power-game scenario” combines the clauses that are jointly supported by the United States and the European Union, and (5) the “appropriate scenario” is a compilation of the clauses typically included in large membership agreements. This chapter compares and contrasts the implications of each scenario and identifies their common ground. Although each scenario represents an ideal type unlikely to materialize, the comparison offers insights into how the multilateral trading system could be developed to improve the integration of environmental concerns.

This chapter first characterizes the fundamental purposes of the WTO and trade agreements, which should be viewed as much broader than trade liberalization. It then presents the major challenges that the trade system now faces. Special emphasis is paid to technological change since the WTO was created in 1995, namely, the development of global value chains. Finally, the author contends that trade agreements, in response, must be designed and conditioned upon social policy commitments. They should include, or be conditioned upon, agreements that cover: coordinated tax policy to combat harmful tax competition, tax avoidance, and tax evasion; domestic social security and job retraining, supported by trade adjustment commitments; labor protection; protections against social dumping; and accommodation of industrial policy experimentation for development. It will not be an easy process to reconceive trade agreements to better ensure social inclusion through these means, but the current system otherwise could unravel.