The two key questions of regionalism, therefore, are whether it leads to freer (online) global trade and whether it complements the WTO or whether it competes with the WTO. The answers depend to a large extent on why it occurs. Are RTA laboratories experimenting with rules in new areas that allow for further economic integration and the basis for a multilateral agreement in the future? Or is this trend mainly due to the frustration of the stagnation of WTO negotiations and are regional negotiations seen as an alternative to the multilateral system? Another impetus for ATRs has been the desire to modernize trade agreements and develop disciplines in new areas that would help global supply chains work more effectively. Dramaticly lower ICT costs have allowed companies to extend their supply chains, procure components and assemble them into finished products wherever they are at least expensive. However, this fragmentation also relies on reducing trade costs beyond tariffs, as it often involves cross-border investment and access to financial and other services, as well as the need to transfer physical inputs around the world. Richard Baldwin argues that this 21st century regionalism is fundamentally different from that of the 1990s and has a very different impact on the global trading system. 29 However, due to a lack of consensus among WTO members, no audit reports have been finalized since 1995, when the review of agreements took place in individual working groups prior to the committee`s establishment. At the country level, policy arguments on the impact of ATRs on support for multilateral liberalization tend to focus on the effects of preference erosion and the potential for diversion of negotiating resources. If special interests are powerful enough to influence negotiations, to protect themselves, for example with restrictive rules of origin, there is a strong incentive to avoid multilateral liberalization that could undermine this advantage. In north-south ATRs, developing countries often negotiate to maintain access to markets important to industrialized countries. Once they are in this area of preference, their exporters will not have further liberalization, either multilaterally or regionally, that could jeopardize their advantage over third-party competitors.
Another practical concern is that, in most countries, the means of negotiation are limited and that the transition to regional or bilateral negotiations will inevitably divert attention from multilateral negotiations. Report on the Treatment of Medical Devices in Regional Trade Agreements (RTA) This led to what lawyer John Jackson described as a “code-bound” MFN during the Tokyo multilateral trade round (1973-1979). 10 For example, under the Public Procurement Agreement, the signatories agreed to open public procurement for the importation of competition by designated public bodies, but only by the signatories of the agreement, who also agreed to open their public procurement. As Jackson (op. cit.) points out), these codes do not explicitly limit the MFN to signatories, but they allow countries to impose conditions on benefits. Key WTO members are currently working to negotiate further liberalization of trade in services, with a similar multi-lateral approach, with the view that the resulting benefits for market access will be limited to signatories. It is not certain that such an agreement can be placed under the roof of the WTO, as it would require a consensus of all members, whether or not they are parties to the agreement.