Abstract
During the first twenty years of the World Trade Organization’s history, the multilateral trading system has increasingly been accompanied by (1) free trade agreements (FTAs) and (2) preferential trade arrangements (PTAs). Such agreements have proliferated steadily, with several hundred having been notified to the WTO as of early 2016. However, there have been some significant changes in the types of trade agreements being negotiated outside the WTO in recent years. Since 2010, there has been a continued proliferation of “traditional” FTAs, but there have also been notable new developments. These include: an increase in multi-party FTAs; an increase in FTAs featuring more than one major economy; FTA coverage extending beyond the scope of the WTO Agreements; and subject-specific plurilateral negotiations being conducted outside the WTO negotiating structure. This chapter documents the rapid ascendancy of mega-FTAs and plurilateral trade agreements and explores the implications of these larger, more complicated and arguably more powerful trade agreements, with an emphasis on the Asia-Pacific region.
This is a preview of subscription content, log in via an institution to check access.
Notes
- 1.
In this chapter, I use ‘FTAs’ to refer to reciprocal trade agreements. Such agreements are also sometimes referred to, e.g., by the WTO, as ‘RTAs’ or ‘regional trade agreements’. For information about reciprocal trade agreements notified to the WTO, see the Regional Trade Agreements Information System, available at http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.
- 2.
PTAs are unilateral trade preferences, including those provided pursuant to Generalized System of Preferences programs. For information about PTAs notified to the WTO, see the Database on Preferential Trade Arrangements, available at http://ptadb.wto.org/?lang=1.
- 3.
The Trans-Pacific Strategic Economic Partnership Agreement, consisting of Brunei, Chile, New Zealand and Singapore, is a notable exception. This agreement, often referred to as the P-4, is the precursor agreement to the Trans-Pacific Partnership (TPP). See New Zealand Ministry of Foreign Affairs and Trade, Trans-Pacific Strategic Economic Partnership Agreement (P4), available at www.mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/p4/; Office of the United States Trade Representative, Trade Facts, United States to Negotiate Participation in Trans-Pacific Strategic Economic Partnership (2008) 1, available at https://ustr.gov/archive/assets/World_Regions/Southeast_Asia_Pacific/Trans-Pacific_Partnership_Agreement/Fact_Sheets/asset_upload_file602_15133.pdf.
- 4.
See It’s Official: China, South Korea Sign Free Trade Agreement, The Diplomat (2015) 1, available at http://thediplomat.com/2015/06/its-official-china-south-korea-sign-free-trade-agreement/.
- 5.
See Ministry of Foreign Affairs of Japan, Japan—Republic of Korea FTA (Overview), available at www.mofa.go.jp/policy/economy/fta/rok/overview.html.
- 6.
See, e.g., John H Jackson, The Jurisprudence of Gatt and the WTO: Insights on Treaty Law and Economic Relations (Cambridge University Press, 2000) 185.
- 7.
Annex 4 contains four plurilateral agreements, but only two of them remain in effect: the Agreement on Government Procurement and the Agreement on Trade in Civil Aircraft. The other two, the International Dairy Agreement and the International Bovine Meat Agreement, were terminated in 1997. See The World Trade Organization, Plurilaterals: Of Minority Interest, available at www.wto.org/english/thewto_e/whatis_e/tif_e/agrm10_e.htm.
- 8.
Currently there are plurilateral negotiations progressing within the WTO with respect to liberalizing trade in environmental goods. The Environmental Goods Agreement negotiations currently comprise 17 WTO members that account for most of the world’s trade in environmental goods and services. The participants are: Australia, Canada, China, Costa Rica, Chinese Taipei, the European Union, Hong Kong (China), Iceland, Israel, Japan, Korea, New Zealand, Norway, Switzerland, Singapore, Turkey and the United States. See The European Commission, The Environmental Goods Agreement (EGA): Liberalising trade in environmental goods and services (2015) available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1116.
- 9.
The current participants are: Australia, Canada, Chile, Chinese Taipei, Colombia, Costa Rica, the European Union (representing its 28 Member States), Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan, Panama, Paraguay, Peru, Republic of Korea, Switzerland, Turkey, the United States and Uruguay. Mauritius also intends to join the negotiations.
- 10.
See, e.g., The European Commission, Trade in Services Agreement, available at http://ec.europa.eu/trade/policy/in-focus/tisa/.
- 11.
CIA factbook, World Bank, IMF, United Nations.
- 12.
These negotiations have accelerated of late. See ‘U.S., China Make Progress Toward Trade and Investment Deal’, The Wall Street Journal (2015) 1, available at www.wsj.com/articles/u-s-china-make-progress-toward-trade-and-investment-deal-1443208549.
- 13.
- 14.
Whether it achieves that goal is the subject of much discussion. See, e.g., CL Lim, Deborah Kay Elms and Patrick Low, The Trans-Pacific Partnership: a Quest for a Twenty-first Century Trade Agreement (Cambridge University Press 2012) 1.
- 15.
See Office of the United States Trade Representative, T-TIP Issue-by-Issue Center, available at https://ustr.gov/trade-agreements/free-trade-agreements/transatlantic-trade-and-investment-partnership-t-tip/t-tip.
- 16.
The GATT operates on a negative list approach, meaning that newly acceding WTO members must bind their tariffs on all tariff lines except for those lines which they specifically excluded. The WTO membership approves accessions when meeting as the Ministerial Conference. While Article XII(2) of the WTO Agreement provides that accession can be approved by a two-thirds majority of the WTO membership, in practice this approval occurs by consensus rather than a vote.
- 17.
See, e.g., Michitaka Nakitomi, Plurilateral Agreements: A Viable Alternative to the WTO? (2013) 1, available at www.wto.org/english/res_e/reser_e/wts_future2013_e/Nakatomi.pdf; Global Agenda Council on Trade, A Plurilateral “Club-of-Clubs” Approach to World Trade Organization Reform and New Issues (2010) 1, available at www3.weforum.org/docs/GAC10/WEF_GAC_Trade_Paper_2009-10.pdf.
- 18.
See generally William J Davey, ‘Dispute Settlement in the WTO and RTAs: a Comment’, in Lorand Bartels and Federico Ortino (eds), Regional Trade Agreements and the WTO Legal System (Oxford University Press 2006) 1.
- 19.
See Meredith Kolsky Lewis and Peter Van den Bossche, ‘What to Do When Disagreement Strikes?: The Complexity of Dispute Settlement Under Trade Agreements’, in Susy Frankel and Meredith Kolsky Lewis (eds), Trade Agreements at the Crossroads (Routledge 2014) 14.
- 20.
See, e.g., Oona Hathaway, ‘Path Dependence in the Law: The Course and Pattern of Legal Change in a Common Law System’ (2001) 86 Iowa L. Rev. 601, 618–19 (“The power to set the agenda can thus become, in a very real sense, the power to determine the result.”); Meredith Kolsky Lewis, ‘The Politics and Indirect Effects of Asymmetrical Bargaining Power’, in Tomer Broude and others (eds), The Politics of International Economic Law (Cambridge University Press 2011) 29.
- 21.
In addition to participating in the mega-FTAs described above, these countries have also been active in negotiating sector-specific plurilateral agreements both outside and within the WTO. The rules established in these agreements similarly become the de facto multilateral rules. To the extent these negotiations are conducted on an MFN basis, with the benefits being applied even to non-participants, such agreements should prove beneficial to the Asia-Pacific’s poorer members as well as to its economic leaders, as such countries would not have to make any commitments themselves but would still be able to take advantage of new market opportunities. See Matthias Helble and Ganeshan Wignaraja, Asian Development Bank Institute: Asia Pathways, Plurilateral trade agreements: an overlooked but powerful force for international trade opening for Asia? (2015) 1, available at www.asiapathways-adbi.org/2015/02/plurilateral-trade-agreements-an-overlooked-but-powerful-force-for-international-trade-opening-for-asia/.
- 22.
See, e.g., LAW360, Froman Dismisses Notion of Renegotiating the TPP (2016) 1, available at www.law360.com/articles/773402/froman-dismisses-notion-of-renegotiating-tpp; Ross Marowits , ‘Trans-Pacific Partnership Can’t Be Renegotiated, Canadians Must Pick ‘Yes’ or ‘No’: Freeland’, Huffington Post Canada (2016) 1, available at www.huffingtonpost.ca/2016/01/14/trade-minister-says-renegotiation-of-pacific-trade-deal-not-possible_n_8982984.html.
- 23.
It is possible this could be accomplished via side letters or other agreements kept outside of the TPP itself.
- 24.
The goal of free trade across the Asia-Pacific was promulgated by APEC leaders at their 1994 meeting in Bogor, Indonesia. However, APEC has not had the institutional strength to lead efforts to create a regionwide free trade area or agreement. See, e.g., Ming Du, ‘Explaining China’s Tripartite Strategy Towards the Trans-Pacific Partnership Agreement’, (2015) 18 Journal of International Economic Law 407, 410.
- 25.
For more about the FTAAP concept, see, e.g., C Fred Bergsten, ‘Toward a Free Trade Area of the Asia Pacific’ Peterson Institute for International Economics (2007) 1, available at www.iie.com/publications/papers/bergsten1107.pdf; Peter A Petri and others, ‘The TPP, China and the FTAAP: The Case for Convergence’, in Tang, Guoqiang and Peter A Petri (eds), New Directions in Asia-Pacific Economic Integration (Honolulu: East-West Center 2014) 1, Available at SSRN: http://ssrn.com/abstract=2438725 or http://dx.doi.org/10.2139/ssrn.2438725; Peter A Petri, and Ali Abdul-Raheem, Can RCEP and the TPP be Pathways to FTAAP? (2014) 1, Available at SSRN: http://ssrn.com/abstract=2513893; Meredith Kolsky Lewis, ‘The TPP and the RCEP (ASEAN + 6) as Potential Paths Toward Deeper Asian Economic Integration’, (2013) 8 Asian J. WTO & Int’l Health L. & Pol. 359.
- 26.
Peter A Petri and Ali Abdul-Raheem, ‘Can RCEP and the TPP be Pathways to FTAAP?’, chapter 2 in Pacific Economic Cooperation Council, State of the Region, 2014 (“much of the economic and political benefits of regional economic integration would still be unrealized” as a result of the RCEP and TPP alone) (2014) (obtained from SSRN).
- 27.
See, e.g, Peter A Petri and Michael G. Plummer, The Trans-Pacific Partnership and Asia-Pacific Integration: Policy Implications (2012) 2 (noting commentary positing the TPP as an effort to contain China but arguing the TPP and Asia-only agreements are not zero-sum propositions).
- 28.
See Ming Du, ‘Explaining China’s Tripartite Strategy Towards the Trans-Pacific Partnership Agreement’, (2015) 18 Journal of International Economic Law 407.
- 29.
The Diplomat, As TPP Leaders Celebrate, China Urges Creation of Asia-Pacific Free Trade Area (2015) 1, available at http://thediplomat.com/2015/11/as-tpp-leaders-celebrate-china-urges-creation-of-asia-pacific-free-trade-area/.
- 30.
Wall Street Journal, U.S. Blocks China Efforts to Promote Asia Trade Pact (2014) 1, available at https://www.wsj.com/articles/u-s-blocks-china-efforts-to-promote-asia-trade-pact-1414965150.
- 31.
Supra note 29.
- 32.
In Petri and Plummer’s 2012 article (above n. 28 at 3) they dismissed the possibility of China joining the TPP because ‘China is unlikely to agree now to various concessions—on state-owned enterprises, services, intellectual property, and labor—that the United States would likely demand to open its markets further.’, but two years later, they had come to see this as a feasible development. See Peter A Petri and others, The TPP, China and the FTAAP: The Case for Convergence (2014) 1.
- 33.
See Peter A Petri and others, The TPP, China and the FTAAP: The Case for Convergence (2014) 7 (arguing that TPP enlargement to 17 members through the addition of China, Indonesia, Korea, the Philippines and Thailand would lead to significant economic benefits).
- 34.
Peter A Petri and others, The TPP, China and the FTAAP: The Case for Convergence (2014).
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2017 Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Lewis, M.K. (2017). Mega-FTAs and Plurilateral Trade Agreements: Implications for the Asia-Pacific. In: Chaisse, J., Gao, H., Lo, Cf. (eds) Paradigm Shift in International Economic Law Rule-Making. ODS 2017. Economics, Law, and Institutions in Asia Pacific. Springer, Singapore. https://doi.org/10.1007/978-981-10-6731-0_24
Download citation
DOI: https://doi.org/10.1007/978-981-10-6731-0_24
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-10-6730-3
Online ISBN: 978-981-10-6731-0
eBook Packages: Law and CriminologyLaw and Criminology (R0)