The number of Free-Trade Agreements (FTAs) continues to grow and increasingly set the rules for world trade. The effects of these agreements go beyond the contracting parties and also extend to third countries. This has often been seen as negative because trade diversion, caused by tariff preferences, distorts trade and discriminates against third countries.
However, a specific FTA is not necessarily negative for a third country that is not party to the actual agreement. The long-term dynamic effects might serve to multilateralise FTAs and FTAs might also spur unilateral trade liberalisation. Notwithstanding any speculation about such effects, a lot of FTA provisions could benefit third countries in various ways. It is these potential benefits that are the focus of this study.