Global Trade Policy Development in a Two-Track System

Abstract

The World Bank identifies two trends within the international trading system: multilateral negotiations sponsored by GATT/WTO based on evolving rules grounded in non-discrimination, and bilateral and regional negotiations between nations that reduce trade barriers on a reciprocal and preferential basis. This paper asks how we might enhance the global trade policy development process through interaction and coordination between these two trade policy development systems. It seeks an understanding of the nature of bilateral trade negotiations so that we can compare bilateral and WTO-sponsored multilateral processes. In so doing we can observe how these two systems naturally interact thus enabling us to consider how that interaction may be better designed to enhance the international trade policy development system. After examining current trends in bilateral and regional trade negotiations this paper considers the opportunities and challenges of a two-track system for developing trade policy by examining bilateral trade negotiations conducted by Australia, Singapore and the United States. The paper concludes with observations that may assist in re-framing the current debate over bilateral and multilateral trade negotiations and includes recommendations for the effective management of a two-track trade policy development system.