In a new Economic Letter for the Federal Reserve Bank of San Francisco, Carolyn Evans shares this diagram representing a series of trade agreements among various countries:

This "spaghetti bowl" shows the complexity in managing global trade policy through a series of partner-to-partner agreements--or Preferential Trade Agreements (PTAs).  Evans:

This type of proliferation of agreements has been termed a “spaghetti bowl” because there are so many overlapping bilateral arrangements among nations. Such a complex mesh of relationships could have the unintended effects of raising the cost of trade and distorting production patterns across countries. These consequences may emerge from two aspects of a plethora of trade agreements: rules of origin and tariff rates.

Rules of origin set out standards determining where a particular product originates. They specify that, in order for a product to be deemed to originate from a certain country, a meaningful portion of that product’s value must come from that country. Rules of origin are put in place to eliminate cheating, whereby one country imports a product from a non-partner country and then re-exports it to the free-trade partner. Satisfying rules-of-origin requirements has become increasingly complex, since production processes now stretch across multiple countries. When an assembling country sources inputs from a number of other countries and then exports the finished product to another final market, it becomes difficult to determine exactly where the product originates. Since each PTA has its own rules of origin for particular parties to the agreement, meeting those requirements may become quite complicated.

While global, multi-lateral trade agreements are very difficult to work out, they may be a more efficient way to work out more effective, and efficient global trade.  They also, Evans argues, offer "unique economic opportunities over and above what is available via more limited agreements." 

Read Bilateralism, Multilateralism, and Trade Rules here.