International Trade Agreements: Laboratories of Innovation or Propellers of Fragmentation?

This article examines the evolving relationship between free trade agreements (FTAs) and the World Trade Organization (WTO), focusing on how modern plurilateral and bilateral trade arrangements impact the multilateral trading system. It traces the historical development from the General Agreement on Tariffs and Trade (GATT) through the WTO era, highlighting the shift from primarily regional, bilateral FTAs to complex mega-FTAs and plurilateral negotiations both inside and outside the WTO framework, such as the Trade in Services Agreement (TiSA) and Joint Statement Initiatives (JSIs). The article argues that while FTAs have facilitated innovation and deeper liberalization, they have also contributed to fragmentation and challenges for consensus-based multilateralism. It concludes that given the persistent divergence in Members’ liberalization ambitions, the key question is whether plurilateral initiatives should be accommodated within the WTO or accepted as occurring outside it, with JSIs offering a potential path to maintain WTO relevance while allowing variable geometry among Members.