limited. the experience in other relevant areas such as investment, intellectual property protection and public procurement, has been similar. indeed, the collapse of the doha round in 2001 had already raised doubts about the wto governance framework. in particular, the effectiveness of the dispute resolution system and the viability of conducting trade discussions and adopting decisions involving over 160 countries, on the basis of general consensus, had been called into question. in fact, given the deadlock in wto negotiations, countries have chosen to shift their liberalisation efforts towards regional or bilateral agreements. however, it is important to stress that bilateral agreements represent only a second - best solution. they usually entail some form of trade diversion which, from a global perspective, reduces the positive effects stemming from trade creation. 4 what is more, bilateral or regional agreements, give rise to situations in which large trading nations or blocks are typically in a stronger negotiating position than other economies, generating an asymmetric system of international relations. and, in this context, a trade war has unfolded, which is already taking a heavy toll as regards its effects on global trade and global uncertainty and is currently one of the greatest threats to the world economy. hoeckman ( 2018 ), “ revitalizing multilateral governance at the world trade organization ”, report of the high - level board of experts on the future of global trade governance. https : / / cadmus. eui. eu / handle / 1814 / 60580 dai, mian, yoto yotov and thomas zylkin ( 2014 ), “ on the trade - diversion effects of free trade agreements ”, economics letters, 122 ( 2 ) : 321 - 325. 5 / 8 on the financial front, the international architecture has also become more fragmented during the last decade. the difficulty of reforming the imf´s governance structure and the impression that its resources might prove insufficient should a severe crisis occur, have contributed to the emergence of multiple layers in the global financial safety net. 5 since the global financial crisis, the system has expanded to encompass multiple forms of insurance, comprising the imf and a number of regional financial arrangements ( rfas ) — the size of which has increased from almost negligible amounts in the early 2000s to more than 1. 5 trillion dollars today —, bilateral swap lines and reserve arrangements. the proliferation of regional financial agreements is a response to countries ’ need to ensure access to support for their balance of payments when circumstances require it — in some cases subject to less

have become apparent over the years. i would then like to discuss why reforms are key to the survival of multilateralism, with some ideas for a way forward to tackle current challenges in an increasingly interconnected and digitalised global economy. the benefits of multilateralism the bretton woods agreements of 1944 were the cooperative response to the unilateral actions taken in the early 1930s that led to a period of historic global economic contraction. to quote anne krueger, this episode is an excellent example of how " efforts to depart from 3 / 8 multilateralism have provided more vivid illustrations of the need for multilateral solutions to international economic policy issues ”. 1 ever since the signing of the bretton woods agreements, international cooperation has focused on creating a system governed by generally accepted rules. these have been complemented by mechanisms and procedures to ensure compliance and to resolve potential conflicts on the basis of fairness and equity from the perspective of all member states. in this rules - based system, multilateral organisations play a key role, by promoting the transparency and predictability of the system and by seeking to limit free - riding. there is a broad consensus that this system has been key to the development of globalisation and the promotion of economic growth and prosperity for many countries over the past half century. trade barriers were drastically reduced and trade flows soared. according to the wto, between 1948 and 1993 the value of world merchandise exports increased from $ 59 billion to more than $ 3, 000 billion ; and they jumped to five times that figure after the creation of the wto. more importantly, in 1948, 63 percent of those exports were traded by western europe and the us, by 1993, this percentage had decreased to 58 percent and in 2016 it reached 48 percent, with a major shift in flows towards emerging asian countries. at the same time, financial flows were gradually liberalised and a global financial system emerged, with the active participation of global banks and investment firms. in addition, foreign direct investment inflows have increased tenfold since 1993. the opening up of the current account and the subsequent expansion of trade and financial flows enabled many countries to raise their development status. in this vein, gdp per capita in low and middle income countries doubled in constant terms from 1995 to 2016, while extreme poverty was notably reduced. the spanish experience since the mid - 1980s, when we joined the european union, constitutes a canonical example of the benefits that the opening up and liberalisation of an economy can bring about in terms