RTAs in the Americas: State of Play >>
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especially for the purposes of job creation and the generation of export revenue through investments in export-oriented assembly operations. Market access insurance. RTAs provide fallback options that the regional economies can activate in virtually any scenario of global trade policy—that is, should any one policy front yield suboptimal outcomes. Multilateral talks may become protracted or result in “minimalist” outcomes, rather than delivering a substantial, deep agreement. RTAs can serve as an insurance policy against the failure to obtain market access through other means. This may be the case especially in the most integrated regional economies, such as Mexico and Chile. And countries that have secured access to their major markets by way of RTAs have less to lose in global talks, which can strengthen their bargaining positions, though there are arguments that this may also lead to more friction in the multilateral forum. Flexibility. Adjusting to the changing competitive advantages and the demands of the global markets presents a daunting challenge to policymakers. Global production and trade patterns are evolving at unprecedented speed, and the variety of products traded in global commerce has grown exponentially in the span of just a couple of decades. Changes in technology and reduction of transportation costs—not to mention the rise of electronic commerce and the growing importance of trade in services—will accentuate the speed of change in the world economy. A multitiered trade strategy allows for greater agility in exploiting today’s niches, which might not have existed yesterday. Regional agreements can also pave the way for exports of “regional products”—goods that do not necessarily yet have prospects in the global market but do in the regional one—as well as serve as a training ground for export operations elsewhere down the road. Synergies between tiers. Regional and global trade rules are essentially about the same disciplines. Thus, understanding, negotiating, and implementing agreements on either front will yield positive externalities to the other. For instance, negotiating liberalization in services trade in the WTO would undoubtedly improve a govern-
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