This led to what lawyer John Jackson called the MFN “code-conditional” during the tokyo round of multilateral trade negotiations (1973-1979). 10 For example, under the Public Procurement Agreement, the signatories agreed to open public procurement for the importation of competition by designated public bodies, but only by the signatories of the agreement, who also agreed to open their public procurement. As Jackson (op. cit.) points out), these codes do not explicitly limit the MFN to signatories, but they allow countries to impose conditions on benefits. Key WTO members are currently working to negotiate further liberalization of trade in services, with a similar multi-lateral approach, with the view that the resulting benefits for market access will be limited to signatories. It is not certain that such an agreement can be placed under the roof of the WTO, as it would require a consensus of all members, whether or not they are parties to the agreement. Progress has often been timid in the areas of WTO-X and, in particular, those below the border, regulatory areas that are supposed to be so important to global supply chains. As the 2011 WTO Report on World Trade indicates, wto X-area provisions are often unenforceable. On the contrary, they are often horrifying and do not require much beyond information exchange and cooperation, in order to remove unintended barriers to trade that result from different regulatory approaches. 32 While this chapter is not in the spotlight, it is worth considering two other types of “multilateral” agreements that attract attention. These would be possible alternatives to multilateral negotiations subject to the WTO consensus rule, which allows any member to block an agreement, or to bilateral and regional agreements outside the WTO. The study of these options has intensified since the Doha Round of WTO negotiations, launched in 2001, fell into its current zombie state – not alive, but not completely dead and buried. Another form of competitive liberalization can occur when outsiders try to compensate for trade discrimination by joining an RTA from which they were initially excluded.
It has been suggested that this process could, at least in theory, lead to global free trade, as new countries are gradually trying to join. “Open regionalism,” which allows third parties to join ATRs relatively easily, has also been proposed as a way to promote this form of competitive liberalization and to transform the “spaghetti shell” into a “lasagna plate”. However, some economic models show that this process falls well short of global free trade and instead ends with a handful of competing blocs that together reduce global well-being. 28 In practice, memberships of existing ATRs or non-EU membership unions were relatively rare. Currently, WTO members are engaged in a round of multilateral negotiations known as the Doha Development Agenda. Negotiations are currently stagnating; the four main players in the food trade (Brazil, the EU, India and the United States) have held discussions but have not yet reached an agreement. At the country level, policy arguments on the impact of ATRs on support for multilateral liberalization tend to focus on the effects of preference erosion and the potential for diversion of negotiating resources.