Regionalism and Multilateral Trade Agreements (original) (raw)
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This chapter examines the interplay of geo-economics and legitimacy in the dynamics between regionalism and multilateralism. Its objective is to provide perspectives on why and how to harness regional foreign trade policies as a means to build a more legitimate international trade system. Thus, the starting point of this chapter is a normative conceptualization of trade multilateralism, defined in terms of decision-making and output. The crisis of trade multilateralism does not stem from just the Trump presidency, but is of much deeper and older origin. It could be argued that it depends more on geo-economic policies, embedded in the guise of a multilateral, equitable, and non-discriminatory world trade system. So the recent re-emergence of regionalism and regional rivalries would not seem to present us with a new phenomenon, but would instead represent a qualitative transformation of the geo-economics of a US-led world order into the geo-economics of a pluralistic, post-hegemonic international system. Yet this chapter argues that this renewed prevalence of geo-economics has not made multilateralism obsolete (in the sense of a legitimate form of transnational governance). In fact, there are both normative and geo-economic reasons for consolidating legitimate multilateralism in the contemporary era. This solution would be centered on middle powers (like the EU, India, and Japan) and rely heavily on the emerging Indo-Pacific region.
Proliferation of Regional Trade Agreements: Complementing or Supplanting Multilateralism
With the creation of the World Trade Organization (WTO) in 1995, the pyramidal design of the international trading system placed multilateralism at the top of the pyramid, regionalism/bilateralism in the middle, and the domestic trade and economic policies of WTO Member States at the bottom of the pyramid. This article questions whether this vertical structure is still the case today, given the tremendous proliferation of regional trade agreements (RTAs) in recent years and the fact that the WTO is losing its centrality in the international trading system. The thesis of this article is that the multilateral trading system's single undertaking is no longer feasible, hence affirming RTA proliferation as the modus operandi for trade liberalization. This article also argues that RTA proliferation implies the erosion of the WTO law principle of non-discrimination, which endangers the multilateral trading system. RTAs can help countries integrate into the multilateral trading system, but are also a fundamental departure from the principle of non-discrimination. This raises the question of whether RTAs are a building block for further multilateral liberalization or a stumbling block.
With the creation of the World Trade Organization (WTO) in 1995, the pyramidal design of the international trading system placed multilateralism at the top of the pyramid, regionalism/bilateralism in the middle, and the domestic trade and economic policies of WTO Member States at the bottom of the pyramid. This article questions whether this vertical structure is still the case today, given the tremendous proliferation of regional trade agreements (RTAs) in recent years and the fact that the WTO is losing its centrality in the international trading system. The thesis of this article is that the multilateral trading system's single undertaking is no longer feasible, hence affirming RTA proliferation as the modus operandi for trade liberalization. This article also argues that RTA proliferation implies the erosion of the WTO law principle of non-discrimination, which endangers the multilateral trading system. RTAs can help countries integrate into the multilateral trading system, but are also a fundamental departure from the principle of non-discrimination. This raises the question of whether RTAs are a building block for further multilateral liberalization or a stumbling block.
Regional Trade Agreements: A Strive to Political integration and common market
This article intends to look at the regional trade agreements (RTAs) that develops protectionist measure to discriminate against certain parts of the world trade and create transaction costs because the need for customs officials to analyze the ‘origin’ of goods. Notwithstanding, regional trade agreements are also politically and economically risky because preferential treatment is becoming merely a reward for governments pursuing non trade related objectives. Let us keep in mind that regional trade agreements naturally die especially when countries formerly had bilateral trade agreements enter into plurilateral. For instance, on May 01, 2004 fully 65 RTAs become defunct as 10 new members joined the EU (Viet .D. Do & William Watson, p-8). More RTAs have life on paper then in reality .However, free trade arrangement, are diplomatically useful and have minimal real consequences. The question then is why do members of RTAs become member of multilateral trade agreements? In Africa, intra-trade is not as common from the 1980 to 2000 the share of internal trade in ECOWAS and Southern Africa Development Community (SADC) grew approximately fourfold, from 2.5 to 11 per cent (Lerand Bartels & Federino Ortino, Economic Analysis & regional trade Agreements, P-13). Crawford & Laird concluded in 2001,’ the overall numbers do not point to clear evidence of diversion alone from imports from non-numbers of RTAs’. In ECOWAS adopted the West Africa Common Industrial Policy to increase intra-regional trade from 12% to about 40% in 2030 (ECOWAS, 2010).
Rising Regionalization: An Assessment of Regional Trade Agreements
Avrasya Etüdleri, 2024
In parallel with the structural change in world trade, Regional Trade Agreements (RTAs) are becoming more prominent and gaining increasing importance. The proliferation of these agreements fills the gap left by multilateral trade negotiations, their scope of influence is expanding beyond reducing trade tariffs. Since the mid-20th century, multilateral trade negotiations have been used to liberalize the global trade, and the Bretton Woods institutions have accelerated this process. Along with multilateral initiatives, countries have also tended to liberalize trade among themselves through bilateral, regional, or interregional formations. Especially in the last three decades, Asia's rapidly expanding role in the world economy and its growing weight in global production and supply chains, coupled with the slowing economic power of developed countries, rising protectionism, and global uncertainties, have shown signs of a significant transformation in the international trade system. The breakdown of the Doha Round process in the face of rapid and structural change in the world economy, the failure of the WTO to realize the expected reforms and improvements, and the effects of the global financial crisis have led member countries to turn to RTAs instead of multilateral negotiations. This interest has increased even more and shifted towards new RTAs, in a sense, mega-regional agreements. This study examines the transformation of multilateral trade negotiations within the liberal trade system and argues that the emergence of new regionalism in this process, and hence the RTA, has promoted globalization through trade liberalization. In this context, it addresses the dynamics of RTAs, which are an essential part of the global trade system and have proven to have trade-creating potential. It argues that they will continue to be preferred by countries to broaden and deepen their trade policies in the coming years.
The Political Economy of Regionalism in World Trade : Is It Compatible with Multilateralism?
Marmara Avrupa araştırmaları dergisi, 2015
Regional trading arrangements (RTAs) became popular in the last decade while the trade negotiations of the Uruguay Round continued under the multilateral track of GATT. This Article reopens a discussion that has divided both economists and policy makers as to whether the trend towards "regionalismn in world trade helps to move the process of multilateral trade liberalization forward or leads to more protectionist preferential/discriminatory practices, thereby undermining the multilateral approach of GATT. The authors, in this study, assess the fallacious view that equates regional freeing of trade with "free traden itself and advocate a ''public choicen approach arguing that whatever the motivations are for the regionalism, they may, on the other hand, give rise to abuse by domestic interest groups for protectionist purposes and therefore endanger the liberalization of the world trading system.
Returns to regionalism: an analysis of nontraditional gains from regional trade agreements
The World Bank Economic Review, 1998
As regional trading arrangements (RTAs) have spread, enlarged and deepened over the last decade, they have posed challenges to economists on both intellectual and policy levels. On the former, do RTAs stimulate growth and investment, facilitate technology transfer, shift comparative advantage towards high value-added activities, provide credibility to reform programs, or induce political stability and cooperation? Or do they, on the other hand, divert trade in inefficient directions and undermine the multilateral trading system?
2005
Dr. Supachai Panitchpakdi, the present WTO Director General, sum marizes the threat posed by the proliferation of RTAs to the WTO mechanism when in a speech he says: "Regionalism can be a powerful complement to the multilateral system, but it cannot be a substitute. The multilateral trading system was created after the Second World War precisely to prevent the dominance of rival trading blocks. The resurgence of regionalism today risks signaling a failure of global economic cooperation and a weakening of support for multilateralism. It threatens the primacy of the WTO, and foreshadows a world of greater fragmentation, conflict, and marginalization, particularly of the weakest and poorest countries" 9
Regional Trade Agreements: A Strike at Multilateralism
The Doha Round of negotiations of the World Trade Organization has become a major battleground between developed and developing countries. Begun in 2001, the Doha negotiations have yet to be concluded, leading to widespread frustration on its sluggish pace. Meanwhile, new Regional Trade Agreements have been launched, begging the question: Has trade governance reached a critical junction, with one path leading to the strengthening of the multilateral principles of global trade, and the other, to the abandoning of these principles and the evolution of a different constitution for 21st-century multilateralism? This paper reviews literature and legal text to deduce answers to these questions. It analyses the relationship between the Trans-Pacific Partnership (TPP) and Comprehensive Economic and Trade Agreement (CETA), and trade multilateralism. This paper finds that RTAs can be seen as a strike at multilateralism and this, in turn, can be regarded as either a negative or positive direction, depending on what principles and objectives are held as the legitimate building blocks of trade multilateralism.