O-2005/18: The Role of Regional Agreements in Trade and Investment Regimes
Two themes have been central to recent work on international trade and investmentagreements; the scope and legitimacy of the WTO, in particular with regard to the so-calledbehind the border issues, and the growth of regional agreements. Whilst much has beenwritten on the trade creating and diverting effects of regional agreements, there has beenmuch less work on the role of regional agreements in rulemaking in trade and investment.This paper argues addresses the question of how rulemaking at the multilateral and regionallevel interact. After outlining the two central themes in the current trade and investmentdebate it then offers a framework for analyzing the relatively neglected question of howdevelopments at the regional (or bilateral level) shape the evolution of the internationaltrade and investment regime. The paper draws on a number of recent case studies theevolution of rules for behind the border issues, the findings of which are summarized. Thepaper argues that it is necessary to view rulemaking (or regime formation) in trade andinvestment as a multi-level process. It suggests that in this process the regional level playeda broadly benign role in the period between the mid 1980s and mid 1990s, but that recentdevelopments suggest that some more malign features of regional initiatives are nowcreeping in. To overcome this there is a need for meaningful negotiations on newrulemaking within the WTO even if this may require a plurilateral approach.