Stumbling Blocks or Building Blocks

While bilateral trade deals are increasing trade amongst countries in regions with lots of bilateral deals has not. Furthermore,

Countries may worry that a multilateral deal would erode the preferential terms they got through bilateral ones. If so, the flurry of bilateral deals may have come at the expense of a world trade agreement. Gary Hufbauer of the Peterson Institute of International Economics in Washington, DC, thinks that China and India have decided they would “rather pursue bilateral FTAs than make the necessary concessions to push Doha across the finish line.”

This is more disturbing than any specific national protectionist policies because it undermines the WTO, the MFN principle, and multilateralism.