Most Favoured Nation: What's The Point of Pointless FTA Provisions?

Marketing.

Welcome to the 116th edition of Most Favoured Nation. The full post is for paid subscribers only, but you can sign up for a free trial below.

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What do Free Trade Agreements actually do?

Even in the era of the modern trade agreement, their main objective is still tariff removal.¹

But beyond tariffs, substantive provisions can include:

• Investor-State Dispute Settlement (ISDS). Foreign investors can be given enhanced rights to sue a government in the event of forced expropriation of assets or general unfair treatment.

• Mutual recognition of conformity assessment. A country can commit to recognise the certifications of conformity assessment bodies based outside of its territory. (In the case of CPTPP, this goes further and commits members to treat conformity assessment bodies based in any member the same as those based domestically.)

• Enhanced mobility for temporary services providers. Certain classes of services providers, such as a computer engineer, may be given access to enhanced visa provisions, allowing them to deliver a contract in person for a fixed period of time. For example, the UK FTAs can give foreign services workers access to its Service Supplier visa (Global Business Mobility).

• SPS equivalence. Food exporters from an FTA partner might be granted preferential regulatory treatment at the border. For example, EU-Canada (CETA) reduced the frequency of physical inspections on products of animal origin entering the EU from Canada.

• Intellectual Property. An FTA might require its members to change its patent rules or extend copyright protection for x number of years.

• ETC.

But even accounting for all of this substance, your modern FTA still includes SO MUCH OTHER STUFF. And much of it, when you actually read it, is kinda pointless.²

For example, the UK-Australia FTA includes a world-first Innovation Chapter. Cool. But other than being innovative, what does it do?