Does the rise of regional trading blocs threaten free trade progress made by the World Trade Organization?

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There are two different points of view on this. The first is that bilateral and regional trade agreements such as the TPP actually move countries in the direction of global free trade pacts and thus are a stepping stone towards the sort of global trade rules that WTO promulgates. Under this view, smaller trade pacts allow countries to move faster towards removing tariffs and other barriers than they would if they needed to wait for the glacial pace at which WTO progresses due to its size. One can also see the regional trade pacts as smaller scale trial runs for WTT negotiations.

Another point of view, though, argues that regional trade pacts often act as substitutes for the WTO ones and lead to fracturing of global trade into small exclusionary blocs. In some cases, such as the EU, regional blocs work well in a global environment, allowing multiple countries to work together in advancing global participation, but in some countries, such as the United States under President Trump, regional pacts can serve to isolate countries and weaken the WTO.

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Let's start with some basics. First, the goal of the World Trade Organization is to tear down barriers to the free trade of goods and services between countries. This could include tariffs or laws that favor domestically produced goods over goods produced in other countries. Second, regional trading blocs can refer to agreements such as the North American Free-Trade Agreement or European Union trading rules.

Regional trading blocs certainly can threaten the goal of free trade, but even if they did, regional trading blocs would not be the problem; rather, countries that are opposed to free trade are, and regional trading blocs are just how those arrangements are made. Thus, it's more accurate to say that countries who oppose free trade are the real threats to the WTO's goal. More likely, however, is that smaller, regional trade blocs, or even bilateral trade agreements, ultimately move countries closer to a free trade system.

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It is certainly possible to argue that the creation of regional free trade blocs threatens free trade in the world as a whole.  It is not inevitable that this will happen, but it is definitely possible.  The reason for this is that regional trading blocs can easily adopt protectionist attitudes with respect to countries that are not part of the bloc.

The World Trade Organization (WTO) is aimed at creating free trade in the world as a whole.  The idea is that worldwide free trade would be beneficial to all countries involved.  They would all be able to benefit from access to markets all around the world.

The creation of regional trading blocs will not necessarily help to bring about free trade around the world.  The danger is that the regional trading blocs will not continue to liberalize rules on trade.  Instead, they will simply erect trade barriers to keep other countries and other regional trading blocs out.  We can imagine, for example, a situation in which the NAFTA countries have free trade with one another but erect trade barriers against the European Union.

Thus, it is at least possible that the rise of such regional trading blocs will erode the gains made by the WTO.

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