Plurilateral Agreements, Multilateralism and Economic Development

Plunlateral agreements among sub-sets of economies have a long history within the multilateral trading system. Plurilaterals may appear superficially less attractive than a set of non-discriminatory multilateral rules that apply to all WTO members but may, both in theory and in practice, be better suited to accommodate diversity across countries in the desire and ability to regulate certain aspects of economic activity. As long as such differences between countries do not lead to discrimination or encroachment on other countries' rights under WTO rules, it is potentially beneficial for the trading system to permit groups of countries to pursue regulatory cooperation, even if other countries do not wish to follow suit. The alternatives to greater accommodation of plurilateral cooperation in the WTO are more preferential (discriminatory) trade agreements and club-based initiatives outside the WTO. Both options are arguably worse for non-participating developing countries than incorporating open, transparent plurilateral agreements into the WTO. Opponents of plurilateral initiatives operating under WTO auspices run the risk of inducing further erosion of the multilateral trading system.