Saving Multilateralism in a Higgledy-Piggledy Trading System

Abstract

Whether international economic integration arrangements result in more liberal trade at the multilateral level cannot be proven with ease. Integration may start this process, but it may also reverse it. New mega-integration deals: the Trans-Pacific Partnership, Regional Comprehensive Economic Partnership and Transatlantic Trade and Investment Partnership are under negotiation. The American policy of creating trade rules for decades to come without the involvement of China in rulemaking may backfire. If China faces a choice of capitulation or exclusion, it may create a parallel trade and payments system. The World Trade Organization (WTO) still has important assets: to convene/service meetings and to settle trade disputes. If the WTO transforms its role from trade liberalisation forum into an institution which supervises and administers international trade rules and obligations, as well as settles international disputes in trade, perhaps this may not be an unwelcome development given the Doha Round agony and the meagre final result in Bali (2013).

Keywords: GATT, WTO, Doha Round, integration, Transatlantic Trade and Investment Partnership, Trans-Pacific Partnership

JEL Classification: F01, F10, F13, F15, F50