Supply Chains, Mega-Regionals and Multilateralism: A Road Map for the WTO

With the WTO trade talks deadlocked since 2008, the US and the EU are turning towards preferential trade agreements, including so-called ‘mega-regionals’. But these leave out the planet’s more dynamic traders – including large emerging economies such as China, India and Brazil – so such agreements can only have a relatively small positive impact. From a world welfare perspective, deals to further integrate markets need to be multilateral. The challenge is how to get there.
This book considers the various ways forward and proposes specific solutions for revitalising multilateral trade liberalisation and rule-making. A key premise is that any road map must recognise that trade today involves supply chains and that these are impacted by many policies. The effect of a deal in one area may be minimal if other policies are not dealt with in parallel.
The book recommends adoption of a ‘supply chain framework’ that helps negotiators identify how an overall package can be constructed that spans the different policy areas that are on the table, including not just tariffs but also services policies that affect the operation of supply chains.
The growth in regional agreements partly reflects supply chain trade dynamics: a need to cooperate on regulatory policies. The WTO offers the flexibility for groups of like-minded nations to do this without implicating all members. The book identifies ways governments can make the WTO a forum for deliberation on new policy areas, learn from regional initiatives, and build on the precedent set by the Bali Agreement on Trade Facilitation to address development concerns in meaningful way.