Dr Rafael Leal-Arcas has been invited to speak on "Proliferation of Bilateral and Regional Trade Agreements: Complementing or Supplanting Multilateralism?" at the Trade Policy Research Forum 2011, Trade Policy Training Centre in Africa, 8-9 August 2011, Arusha, Tanzania.
With the creation of the World Trade Organization (WTO) in 1995, the pyramidal design of the international trading system placed multilateralism at the top of the pyramid, regionalism/bilateralism in the middle, and the domestic trade and economic policies of WTO Member States at the bottom of the pyramid. This presentation questions whether this vertical structure is still the case today, given the tremendous proliferation of regional trade agreements (RTAs) in recent years and the fact that the WTO is losing its centrality in the international trading system. The thesis of this paper is that the multilateral trading system’s single undertaking is no longer feasible, hence RTA proliferation as the modus operandi for trade liberalization. This paper will also argue that RTA proliferation implies the erosion of the WTO law principle of non-discrimination, which endangers the multilateral trading system. RTAs can help countries integrate into the multilateral trading system, but are also a fundamental departure from the principle of non-discrimination. This raises the question whether RTAs are a building block for further multilateral liberalization or a stumbling block.