PUBLICATIONS - SPP Research Paper - PREFERENTIAL TRADE AGREEMENTS VS. MULTILATERALISM: IN THE NEW

The country has been at the forefront of efforts to create a liberalized, rules-based, multilateral trading system since the advent of the General Agreement on Tariffs and Trade (GATT) in 1947, and particularly since the advent of the World Trade Organization (WTO) in 1994. [...] 5 It must be understood that the phrase ‘under the WTO’ does not imply that the WTO exerts positive control as an institution; rather, the phrase is shorthand for the trade governance regime constituted by the WTO Agreements, the WTO DSM, the continual meetings and negotiations between WTO members, and the continual work of facilitation and clarification done by the WTO Secretariat. [...] The larger question, though, is whether these effects and other aspects of the proliferation of PTAs are likely to undermine the multilateral liberalization of trade and the system of international trade governance under the WTO. [...] If the latter, the implications of trade diversion grow more severe, the discontinuity between PTAs could begin to resemble the discontinuity of the preferential system of the 1930s, and the continued multilateral liberalization of international trade could be called into question, along with prospects for international trade governance under the WTO. [...] Moreover, the entire purpose of the WTO and of the system of multilateral negotiations is the liberalization of international trade.