The creation of the World Trade Organization (WTO) in the Uruguay Round of multilateral trade negotiations was a spectacular success. Within nine months of signing the Uruguay Round results, all of the major trading nations that took part in the General Agreement on Tariffs and Trade (GATT) had ratified those results and brought the WTO into existence as of January 1, 1995. This grand success appeared to usher into existence a new era of comprehensive multilateralism in world trade. Now, viewed a decade and a half later, the creation of the WTO seems to represent the high point of multilateralism. While the WTO's dispute settlement system has continued to function reasonably well, its other chief role – to serve as a forum for further negotiations on market liberalization – has not. For those interested in trade negotiations, the plodding, on-again, off-again WTO negotiations do not compare well in terms of effectiveness with the negotiating processes that have lead to a rapid expansion in the number of preferential trade agreements (PTAs) in recent years.
This phenomenal growth in the number of PTAs has raised concerns about their relationship with and effect on the multilateral trading system embodied in the WTO. In principle, the interrelationship of PTAs and the multilateral trading system is governed by GATT Article XXIV. However, there is more or less universal agreement that Article XXIV has not functioned well.