From Spaghetti Bowl to Jigsaw Puzzle? Addressing the Disarray in the World Trade System

Jayant Menon ()

No 140, Working Papers on Regional Economic Integration from Asian Development Bank

Abstract: The rise of mega-regionals such as the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Pacific Partnership (TPP) suggests that the world trade system is fragmenting to the point it appears more like a jigsaw puzzle than a spaghetti bowl. There are both regional and global jigsaw puzzles to be solved—in that order—to clean up the world trade system. But is this even likely? The difficulties of free trade agreement (FTA) consolidation at the regional level are well known, while piecing together the blocs around the world to form a coherent whole is even more challenging. In this context, a way forward is to return to the most widely used modality of trade liberalization—unilateral actions—but this time involving the multilateralization of preferences rather than unreciprocated reductions in tariff rates. As more and more FTAs are negotiated, reference erosion sets in, reducing the resistance of FTA partners to multilateralization. Multilateralization of references may then present a practical way forward in addressing the disarray in the world trade system.

Keywords: multilateralization of preferences; mega-regionals; FTA; TPP; RCEP; reciprocity (search for similar items in EconPapers)
JEL-codes: F13 F14 F17 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-10-01
New Economics Papers: this item is included in nep-int and nep-sea
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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