Regional Representation in the WTO - A New Role for Regional Trade Clubs?

This paper analyses the crisis of decision making in the WTO from the perspective of collective action and public goods theory. At the heart of the current policy paralysis isthe inability of WTO members to collectively provide the global public good of amultilateral trade regime that benefits all. The rise of regionalism is explained by governments 'voting with their feet' and moving away from multilateralism. As the EC experience shows, regions not only achieve more 'deep integration', they also provide regional public goods. Regional preferences are more homogeneous, values are moresimilar and socio-cultural ties closer than at the global level, which facilitates regional collective action. The paper proposes the creation of a 'Club of Regions' in the WTO asa means to recreate incentives for collective action at the global level. It would providea remedy for the present policy paralysis associated with consensus and the single undertaking by providing a more flexible institutional framework and allow regional actors to play a more positive role at the multilateral level.