1. No category

Regionalism and
Multilateralism –
A Forced Marriage?
Myrna S. Austria, Ph.D.
Economics Department
De La Salle University-Manila
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Regionalism
„
Proliferation of RTAS & bilaterals – the
most significant trend in commercial
policy
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Controversial – by nature, discriminatory
„
Yet, trend expected to continue
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Why regionalism?
a.
Less incentive for countries to engage in
WTO given the extensive tariff
liberalization over the past two decades.
„
„
WTO continue to focus on tariffs in
manufactured products and less on
agricultural products
Tariffs no longer the most important
obstacle to international trade
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Why regionalism?
b.
„
„
„
Non-tariff and non-border issues
increasingly becoming more important for
improving international exchange
Difficult to handle in WTO because of political
sensitivity, national sovereignty concerns
IPR, domestic regulation and competition, labor and
environment protection
Issues easier to negotiate bilaterally or by likeminded countries compared to the diverse WTO
membership
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Why regionalism?
c. Trauma of Asian financial crisis
d. Lost of momentum in APEC
e. For the case of the ASEAN
Pressure to stay competitive, given the rapid
emergence of China as an economic power and the
growing attraction of India to FDI;
¾
¾
Competitive liberalization in order attract FDI;
Need to increase leverage in trade negotiations
and discussions
¾
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Making regionalism work in
favor of global free trade
Review of Article XXIV; strict enforcement
„
¾
¾
¾
Article XXIV of GATT has not been binding; WTOconsistency test for RTAs
Adoption of liberal rules of origin (ROO)
Ensure broad product coverage, including
sensitive sectors and minimizing exclusions;
provide clear phase-outs of exclusions.
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Making regionalism work in
favor of global free trade
• Frank assessment of RTAs, taking into
account their stated motivations
whether the stated motivations are best
met by using RTAs
• Successful conclusion of the Doha Round
- still the best solution to possible
adverse effects arising form the
proliferation of RTAs
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Areas of Research
ƒ
Investment issues as they relate to RTAs/FTAs
¾ Implications of investment diversion due to RTAS
¾ FDI, technology transfers and productivity
spillovers
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Reforms at the WTO – Article XXIV; framework for
regionalism
Common framework for bilateralism/regionalism for
the ASEAN
Ex-post empirical work on the impact of trade
liberalization
Impact of non-tariff and non border issues on growth
Dynamic effects of RTAs
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Thank You
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