ABSTRACT
Every country in the world today, with the exception of Mongolia, is a member of at least one plurilateral free trade agreement (PTA) and one bilateral free trade agreement (BTA), and most are members of multiple BTAs. If PTAs were considered the main threat to the world trade system in the 1990s, the concern has since shifted to BTAs. The number of BTAs has been growing at an astounding pace. The outcome of this proliferation of often overlapping BTAs and PTAs is described as the spaghetti bowl effect or, in the Asian region, the noodle bowl effect. It refers to the increased cost of doing business, and welfare losses associated with trade diversion due to inconsistencies between various elements of the agreements. These include, for instance, different schedules for phasing out tariffs, different rules of origin, exclusions, conflicting standards, and differences in rules dealing with anti-dumping and other regulations and policies (Pangestu and Scollay 2001).
