Monday, October 25, 2010

Regional trade agreements as the new glue of multilateralism?

With successful conclusion of the Doha Round stalled for over three years and regional trade agreements (RTAs) proliferating as fast as new leaves in the spring, some trade experts already bemoan the demise of the WTO (I even subtitled a recent article "Is the WTO Withering Away?")  At least half of world trade crosses borders without reference to MFN principles, the most basic of foundational GATT principles.  Is modern trade multilateralism at an end a mere 60+ years after its birth?

Perhaps we underestimate the WTO's staying power.

With the explosion of RTAs comes the exponential growth of what Jagdish Bhagwati calls the "spaghetti bowl" of inconsistent and sometimes inexplicable trade rules that confound exporters to more than one region and have eaten away at the basic premises of the multilateral trading system.  In the near future, however, can we not expect these participants in the global market to demand some mechanism at minimum to compile these multifarious regulations into an easily-searched location and at best to harmonize them to some standardized, business-friendly system?  What other international organization is better equipped than the WTO to use its vaunted data-gathering skills to create the perfect web site to track, categorize, and explain each of the thousands of  RTA rules?  With every WTO Member a party to at least one and usually several RTAs, what better organization to engage its Members in the task of recommending harmonious "regional" trading rules that will return some semblance of predictability and order to the global market?  What Member, acting in its own interests, can possibly resist adapting its RTAs to these user-friendly standards?

RTAs, operating under the WTO umbrella, as the new glue of multilateralism?

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