Under the auspices of the General Agreement on Tariffs and Trade (GATT), international trade has increased significantly—and tariffs have declined equally dramatically—over the past 70 years (see Figures 1 and 2). It comes as no surprise that this growth in trade has been accompanied by the emergence of a near-universal consensus among policymakers on the economic welfare-enhancing effects of free trade (Zahrnt, 2008a; Zahrnt, 2008b).
This implied agreement among governments, however, has not led to smooth and quick trade liberalization. The Doha Development Agenda is entering its tenth year of negotiations, with only a limited chance of a successful conclusion (in its present form) by the end of this year. Regional and bilateral preferential trade agreements continue to proliferate and create room for high trade diversion and distortion effects, even as these agreements comply with GATT Article XXIV.