World trade is increasingly being dominated by preferential trade agreements that have taken precedence over multilateral trade negotiations. Within Asia and the Pacific an explosion of bilateral deals is taking place that seems likely to produce a tangle of hub-spoke trade blocs centered on major Asian or Pacific countries. While many of the emerging free trade agreements appear to be consistent with Article XXIV of GATT and Article V of GATS in principle, the complex and idiosyncratic rules of origin in these agreements threatens to complicate international commerce and to divert trade rather than creating it. Rules of origin are a necessity to determine which products will enjoy reduced bilateral tariffs and which will not and to prevent trans-shipment of goods through the customs territory in a bloc with the lowest tariff.