All for one

Regionalism and the Multilateral Trading System
OECD Observer

Hammering out the multilateral negotiations at Cancún in September will take the present WTO trade round only halfway to its January 2005 deadline. Meanwhile, the percentage of world trade accounted for by preferential regional trade agreements (RTAs) is expected to grow from 43% at present to 55% by 2005 if all expected RTAs are realised. The EU, NAFTA, APEC and MERCOSUR are all examples of regional initiatives. Is smaller better?

Regionalism and the Multilateral Trading System makes the case that regional trade agreements are rather a complement to, not a substitute for, a multilateral system. In fact, many consequences of regional trade agreement activity bolster the case for a strengthened multilateral framework. Through an examination of 10 key areas, from services and labour mobility to intellectual property rights and environment, Regionalism and the Multilateral Trading System shows how RTAs may both help and hinder multilateral trade liberalisation.

At Doha, former WTO director general, Mike Moore, referred to the risk of an à la carte approach in RTAs, in areas such as investment and competition, as being a recipe for confusion. What emerges from this study is a more nuanced picture. RTAs may detract from multilateral efforts by stretching scarce negotiating resources and political capital, or can cause friction between systems generating potentially incompatible rules and standards between different RTAs and the multilateral rules and disciplines of the WTO.

Yet regional trade agreements foster a culture of market opening and structural reform, and frequently go beyond the WTO by either containing provisions that are more far-reaching, or by engaging countries outside of the WTO. But in some particularly sensitive areas, like agriculture and textiles, regional initiatives have been no more successful – and in some cases less successful – than activity at the multilateral level. Furthermore, all RTAs are driven in large measure by geopolitical considerations. The EU has helped Europe unite, for instance, and through NAFTA the United States has consolidated its relations with Mexico. But their role in building a global free trading system is by definition much more limited.

©OECD Observer No 238, July 2003

Economic data


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • How do the largest community of British expats living in Spain feel about Brexit? Britons living in Orihuela Costa, Alicante give their views.
  • Brexit is taking up Europe's energy and focus, according to OECD Secretary-General Angel Gurría. Watch video.
  • OECD Chief Economist Catherine Mann and former Bank of England Governor Mervyn King discuss the economic merits of a US border adjustment tax and the outlook for US economic growth.
  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2017