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The Impact of General Agreement on Tariffs and Trade and World Trade Organization on the Formation of Preferential Trading Agreements

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The organizations being referred to here are the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), which was formed subsequently. Though the prime motive behind the formation of these groups was to prevent any form of discrimination among member nations, it is being witnessed that this is not being followed in practice. In fact, existing imbalances on a regional basis have driven nations to form Preferential Trading Arrangements (PTA) that has been the trend since the past half-century. During the same period, it has also been witnessed that there has been major growth in the degree of multilateral openness within the above organizations. The question being asked by the authors of the paper Mansfield and Reinhardt is as to why nations have relied on preferential liberalization when the prime objective of the above organizations has been to advocate non-discrimination. Additionally, the authors have also performed requisite theoretical and mathematical analysis to determine the various factors that have led to such deviations, which forms a substantial part of the paper currently under review.
The major aim of the current review is to analyze the findings, claims, and arguments of this paper and to determine the extent to which these claims are justified. On the backdrop of such analysis, the paper attempts to provide a suitable set of recommendations on the basis of which further analysis may be initiated.
The authors, by way of the paper, have identified that the international trading system has witnessed a rapid increase in the formation of numerous Preferential Trading Agreements (PTAs). Moreover, the authors have also expressed agreement over the fact that there has been an increased multilateral openness by way of the formation of the GATT and the WTO. However, the authors have expressed that little research has been done for determining how and due to which reasons the multilateral regime has helped in the conception and formation of PTAs by the members of these organizations themselves.