Sep 9, 2009
Trade agreements from the bottom-up
I don't understand why The Economist now declares that trade agreements are bad for multilateral liberalization, while the empirical evidence is still mixed, as some papers find that preferential tariffs cuts cause MFN cuts. Moreover, trade agreements are more like a bottom-up approach to reform while WTO centrism is more like top-down reform. Trade agreements might be the way to go to slowly reach a trade game that fits every player. While a WTO deal might cause a lot of painfully destabilising (efficiency improving) "adjustments", trade agreements could achieve the same results probably less painfully. The WTO should adapt.