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The great maze: Regional and bilateral free trade agreements in Asia


Regional and Bilateral Free Trade Agreements in Asia: Trends, Characteristics, and Implications for Human Development

Asia-Pacific Trade and Investment Initiative
UNDP Regional Center in Colombo

December 2005

Written by Murray Gibbs and Swarnim Waglé
Published by UNDP Asia-Pacific Trade and Investment Initiative


Since January 1995, about 130 Free Trade Agreements (FTA) have been
notified to the World Trade Organization (WTO). There are two facets
to this proliferation: on the one hand, the establishment of the WTO
(and its Single Undertaking) has facilitated the expansion of FTAs by
setting common trade obligations, particularly disciplines on non-tariff
measures; on the other, setbacks in advancing the multilateral agenda
have created new outlets for consideration of bilateral and regional
options. Asia-Pacific has been the latest region to catch up with the
trend, and its countries are exerting renewed efforts to both deepen and
expand regional and sub-regional economic integration, as reflected by a
remarkable scale of negotiating activity under way.

In addition to liberalising most trade in goods and providing improved
access for services, regional and bilateral free trade agreements can be
“WTO-plus,” [1] involving a higher degree of obligation than provided in
multilateral trade agreements. Thus, while some FTAs can constitute a
step toward greater regional integration in Asia-Pacific, others may
frustrate such an effort or even undermine WTO rights of concerned
parties. Further, many governments have yet to fully reckon with the
development implications of the resurgence of an overt political element
in bilateral trade relations. Because there are countries in Asia-Pacific
engaged in such negotiations, it is essential that the implications of
various models of FTAs with diverse trading partners are well-grasped.
For example, qualitative differences in scope, intent and implications
exist between South-South FTAs and North-South FTAs, all warranting
greater understanding.

This Paper is divided into four main parts. Parts I, II and III examine this
phenomenon of FTA proliferation and the underlying forces and
motivations of key players at work. Part IV builds on the analysis to
address the impact of the FTA explosion on human development policy
choices in key areas such as agriculture, textiles, rules of origin,
intellectual property, trade in services, and investment.


[1The term “WTO-plus” has become common usage to describe provisions in FTAs that go
beyond WTO obligations. By definition, almost all FTAs would be WTO-plus in providing
freer access for goods (and services) than offered under GATT MFN tariff schedules and
GATS schedules of commitments. Most WTO agreements also provide members with
rights to take specific actions in pursuit of development objectives; provisions in FTAs that
erode these rights could be termed “WTO-minus.”

 source: UNDP