To some extent, trade agreements and the rules of trade administered under the World Trade Organization (WTO) are superfluous. Americans would be better off if the U.S. government unilaterally adopted policies that enable freer trade - reducing tariffs, curtailing regulations and other policies that impede competition, etc. - regardless of what other governments do. We don’t need consent from Brussels, Tokyo or Beijing to implement the reforms that would make our economy more efficient.
But with political aversion to unilateral liberalization, trade agreements based on reciprocity have long been the vehicle of choice for reform. From the founding of the General Agreement on Tariffs and Trade (GATT) in 1947 through the creation of the WTO in 1995, most U.S. trade liberalization was achieved through eight multilateral “rounds” of negotiations under the auspices of the GATT.
But multilateral trade liberalization has failed to produce meaningful results since the mid-1990s. Since then, bilateral and regional free trade agreements have emerged as preferred alternatives - with fewer countries involved, the issues are more manageable and it’s easier to reach agreement. By and large, trade agreements have helped reduce domestic impediments to trade, expand our economic freedoms and lock in positive reforms, even if only as the residual byproduct of an ill-premised mercantilist process.
On this page you will find Cato’s work on trade negotiations, agreements, disputes, and obligation undertaken in those agreements and at the WTO.