From the press release for the World Trade Report 2011:
Deep PTAs
More and more PTAs are deep rather than shallow agreements. They include a wide range of issues beyond tariffs, such as services, investment, intellectual property protection, and competition policy. These policy areas involve domestic regulations (or behind-the-border measures).
Therefore the analysis may need a framework distinct from the more conventional assessments of trade creation and trade diversion because changes to domestic regulations are difficult to tailor so that they favour only selected trade partners.
Deep integration is likely to occur for several reasons. First, as trade becomes more open, countries’ policies increasingly depend on each other. As a result, unilateral decision-making is inefficient compared with decisions taken collectively.
Secondly, deep integration agreements may be necessary to promote trade in certain sectors and economic integration more broadly. This applies to international production networks which require a governance structure beyond low tariffs.
The distinction drawn here between "deep" and "shallow" integration seems to focus on the contrast between (1) tariffs on goods (and probably quotas as well), i.e., border measures, and (2) all other measures. But even in 1947, the GATT had gone beyond tariffs on goods, through the non-discrimination principle among other things. And of course, in 1995, the WTO went even further, in a number of areas.
It seems to me that a better dividing line would be between (1) protectionism, which includes tariffs and other forms of discrimination, including internal laws, and (2) non-discriminatory measures that affect trade. So, taking the examples noted in the press release, non-discrimination rules for services would fit nicely into the "shallow" conception of trade agreements. By contrast, global rules for areas such as competition policy, intellectual property and expropriation of investments would constitute "deep" integration. (And here I mean the rules in these areas that go beyond mere non-discrimination).
As for unilateral decision-making being inefficient, well, that's probably true. But I'm a bit wary of suggesting that trade agreements should substitute "collective decisions" for unilateral ones. I don't think that will play too well in some places.
The report is here: http://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report11_e.pdf There is more detail on "deep" vs. "shallow" integration, which may merit a follow-up post.
