One of the central ironies of today’s financial statecraft is that “global governance” isn’t always, or even mostly, about the “globe.” Instead it’s about groups, and the interaction of groups. This shouldn’t be entirely surprising. As we saw at the outset of this book, multilateral bargaining traditionally corrals countries with diverse economic philosophies and strategic interests, and that are at vastly different stages of development. Crafting a deal of any real import can consequently be difficult, especially when governments are expected to make complex sacrifices and commitments. For every additional party you put at the negotiation table, an exponentially greater number of issues potentially have to be haggled over, as each country will want to maximize its welfare. Thus smaller negotiation groups can be, and indeed often are, quite attractive.

Of all the arenas of international economic law, no other domain has seen the power of small numbers more than international trade. Trade deals of all sizes and natures increasingly populate interstate economic relations, and to such an extent that they are steadily decreasing the importance of the multilateralism embodied by the WTO. For many economists, this is a truly disconcerting phenomenon. Free trade, at least as it has been traditionally conceived, works to the advantage of all countries by lowering barriers to the flow of goods, insofar as each is able to exploit its own competitive advantages. Along these lines, countries that grow the best-tasting, most delicious bananas should be free to sell those bananas to the world, instead of consumers in other countries getting stuck with second-rate bananas just because they live across a border. Meanwhile, other countries can focus on what they do best, whether it be cattle ranching or producing planes. Free trade should be global and allow “each country to concentrate its productive efforts in ways that will give it the most return (and reciprocally, ensure the same maximum return to its trading partners).” In that way, increasingly sophisticated divisions of labor give rise to ever greater “welfare” gains to society.