Tyler Cowen’s latest Bloomberg column is about bilateral trade deals. He’s more optimistic than most:
The smartest case for trade bilateralism is that trade in many goods is already fairly free, but some egregious examples of tariffs and trade barriers remain. Look at agriculture, European restrictions on beef hormones in beef, and the Chinese unwillingness to allow in foreign companies. Targeted strategic bargaining, backed by concrete threats emanating from a relatively powerful nation — in this case the U.S. — could demand removal of those restrictions. Furthermore, the negotiating process would be more directly transactional and less cartelized and bureaucratic.
With regard to liberalizing agriculture, I think the conventional wisdom is that multilateral negotiations are superior. Here’s Jagdish Bhagwati talking to the NY Times back in 2004:
The only way concessions can be made on agricultural subsidies is if you go multilateral. Think of production subsidies, which the United States has: they can’t be cut for just one trading partner. When it comes to export subsidies–which are the big issue for the Europeans and a little bit for us too–we will cut export subsidies say, for Brazil, in a bilateral negotiation, but the Europeans won’t. Then the Europeans will have an advantage. My point is that if subsidies are the name of the game in agriculture, if the foreign countries that export want to remove subsidies, they have to go multilateral.