6.4 A plurilateral approach to negotiation can bring many of the benefits of multilateral negotiation and may be a stepping stone to multilateral liberalisation. Australia should continue to invest effort in the development of plurilateral or sectorspecific agreements, especially those that allow most favoured nation treatment and that can be incorporated into the World Trade Organization. Only preferential agreements with net benefits should proceed Despite the issues raised by PTAs, they are an option for reducing barriers to trade and investment in partner countries in situations where broader agreements are unlikely to be reached. The benefits will vary with the characteristics of the agreement and of the trading partners. They are likely to be higher from nonpreferential agreements that adopt the MFN principle. Where there are a large number of parties to an agreement, cumulation (treatment of inputs from any partner country as local content in calculating the rules of origin) can come close to MFN treatment, as it expands the share of exports that are eligible for the preference (usually through lower tariffs). the complexity and diversity of agreements, the Commission and others have previously argued the case for adopting a more evidencebased approach to developing trade agreements (JSCTIG 2015; PC 2010, 2015b). It is important that the benefits and costs of a proposed agreement are assessed upfront, and compared with the net benefits of other options for achieving similar reductions in trade and investment barriers. Australia’s approach to the assessment of PTAs be much improved. Current processes fail to assess the impacts of prospective agreements adequately and they do not systematically quantify the costs and benefits of agreement provisions and alternative arrangements, such as unilateral reform (PC 2010). 6.5 Preferential trade agreements are an option for reducing barriers to trade and investment in partner countries. They should only be pursued if a strong case can be made that there is a net benefit and in situations where broader agreements are unlikely to be reached. Agreements that adopt the principle of most favoured nation or cumulation (treatment of inputs from any partner country as local content) have been shown to generate higher benefits. Consultation processes could be improved The increasing depth and breadth of issues covered by trade agreements has amplified the importance of good consultation processes in their negotiation. Australians would benefit from processes that enabled greater consultation and transparency in the development of
6.4 A plurilateral approach to negotiation can bring many of the benefits of multilateral negotiation and may be a stepping stone to multilateral liberalisation. Australia should continue to invest effort in the development of plurilateral or sectorspecific agreements, especially those that allow most favoured nation treatment and that can be incorporated into the World Trade Organization. Only preferential agreements with net benefits should proceed Despite the issues raised by PTAs, they are an option for reducing barriers to trade and investment in partner countries in situations where broader agreements are unlikely to be reached. The benefits will vary with the characteristics of the agreement and of the trading partners. They are likely to be higher from nonpreferential agreements that adopt the MFN principle. Where there are a large number of parties to an agreement, cumulation (treatment of inputs from any partner country as local content in calculating the rules of origin) can come close to MFN treatment, as it expands the share of exports that are eligible for the preference (usually through lower tariffs). the complexity and diversity of agreements, the Commission and others have previously argued the case for adopting a more evidencebased approach to developing trade agreements (JSCTIG 2015; PC 2010, 2015b). It is important that the benefits and costs of a proposed agreement are assessed upfront, and compared with the net benefits of other options for achieving similar reductions in trade and investment barriers. Australia’s approach to the assessment of PTAs be much improved. Current processes fail to assess the impacts of prospective agreements adequately and they do not systematically quantify the costs and benefits of agreement provisions and alternative arrangements, such as unilateral reform (PC 2010). 6.5 Preferential trade agreements are an option for reducing barriers to trade and investment in partner countries. They should only be pursued if a strong case can be made that there is a net benefit and in situations where broader agreements are unlikely to be reached. Agreements that adopt the principle of most favoured nation or cumulation (treatment of inputs from any partner country as local content) have been shown to generate higher benefits. Consultation processes could be improved The increasing depth and breadth of issues covered by trade agreements has amplified the importance of good consultation processes in their negotiation. Australians would benefit from processes that enabled greater consultation and transparency in the development of
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