With the United States and Britain emerging from World War II as the two major economic superpowers, both countries felt the need to develop a plan for a more cooperative and open international system. The International Monetary Fund (IMF), the World Bank and the International Trade Organization (ITO) emerged from the Bretton Woods Agreement of 1944. While the IMF and the World Bank would play a central role in the new international framework, the ITO did not plan and its project of monitoring the development of a non-preferential multilateral trade order would be taken over by the GATT, created in 1947. In recent decades, trade agreements have increased not only in number, but also in depth. Trade agreements are now trying to regulate more trade policy instruments than in the past. European regionalism, which has triggered many other regional trade agreements in Africa, the Caribbean, Central and South America, has also helped to advance the GATT agenda, with other countries seeking further tariff reductions to compete with the preferential trade that the European Partnership has enserced. Thus, regionalism has not necessarily increased to the detriment of multilateralism, but in connection with it. The desire for regionalism was probably due to the growing need for countries to go beyond GATT rules at a much faster rate. The best possible outcome of trade negotiations is a multilateral agreement that includes all major trading countries. Then, free trade will be extended to allow many participants to get the most out of trade. After World War II, the United States helped create the General Agreement on Tariffs and Trade (GATT), which quickly became the world`s leading multilateral trade agreement. The advantage of these bilateral or regional agreements is that they promote greater trade between the contracting parties.
They can also accelerate the liberalization of world trade when multilateral negotiations are in difficulty. Recalcitrant countries that are excluded from bilateral agreements and therefore do not participate in the enhancement of the resulting trade may then be led to join them and remove their own barriers to trade. Proponents of these agreements have called this process „competitive liberalization,“ which challenges countries to remove trade barriers in order to keep pace with other countries. Thus, shortly after the implementation of NAFTA, the EU embarked on a free trade agreement with Mexico and finally signed it to ensure that European products do not suffer any competitive disadvantage in the Mexican market as a result of NAFTA. A free trade agreement (FTA) is an agreement between two or more countries in which countries agree, among other things, on certain obligations that affect trade in goods and services, investor protection and intellectual property rights. For the United States, the main objective of trade agreements is to reduce barriers to U.S. exports, protect U.S. competing interests abroad, and improve the rule of law in FTA partner countries. This makes it increasingly difficult to analyse and compare the content of trade agreements, which is necessary to assess their impact on international trade and welfare.. .