From Spaghetti Bowl to Jigsaw Puzzle? Fixing the Mess in Regional and Global Trade

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 and 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 (FTAA) 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 liberalisation-unilateral actions-but this time involving the multilateralisation of preferences rather than unreciprocated reductions in tariff rates. Multilateralisation of preferences presents a practical way forward in addressing the disarray in the world trade system.