Gary P. Sampson
From the perspective of international economic relations, the years spanning the end of the second millennium and the start of the third are characterized by two developments of major importance. In the space of one decade, the world has witnessed both the successful conclusion of the most ambitious round of multilateral trade negotiations in the history of humankind and the launching of another. At the same time, the world has seen a proliferation of regional trading arrangements unprecedented at any period in history. To say the least, these parallel developments appear to be paradoxical: on the one hand, non-discrimination is the pillar of the multilateral trading system; 1 on the other, all but 2 of the 140plus members of the World Trade Organization (WTO) are parties to at least one – and some as many as 26 – preferential trading arrangements. 2 By definition, the cornerstone of these regional trading arrangements is preferential treatment for some members of the multilateral trading system, and discrimination for others. Given this apparent anomaly, it is not surprising that the question has been posed of whether regional trading arrangements hinder or contribute to the good functioning of the multilateral trading system.
This question clearly emerged with the surge in the number of regional trading agreements (RTAs) during the Uruguay Round. The phenomenon was rationalized in some quarters on the grounds that there were doubts about whether the negotiations would succeed. In that environment, it was not surprising for countries to create what were perceived as