Bilateralism and Unilateralism: The Future of International Trade Relations?

Abstract

The most recent developments in international trade relations are characterized by a marked increase in free trade agreements – in particular bilateral agreements – whereas the development of the World Trade System, on the other hand, is in virtual stasis. Free trade agreements forge consolidated areas of economic integration that open up a multitude of strategic options for stakeholders. This raises fundamental questions: What are the structural incentives that trade agreements, in particular bilateral strategies, open up – and are they superior, for example, to those offered by a multilateral approach? This article offers differentiated responses to these questions and concludes with a look at what the future holds for the changing shape and reorganization of international trade policy. Within this context, the article also examines the WTO decision making practice relating to unilateral action, and also focuses on the especially topical issue of ‘border tax adjustments’.