Asia Europe Journal (2004) 2: 121132

DOI: 10.1007/s10308-004-0066-z

ASIA
EUROPE
JOURNAL
Springer-Verlag 2004

Challenges to multilaterism free trade

agreements
Tan Song Chuan
President/CEO, International Trade Institute of Singapore

Abstract
The establishment of free trade took place in the late 18th and 19th centuries
and, after the Second World War, international trade through trade
liberalisation gained increased importance. International organisations such
as the General Agreement in Tariffs and Trade (GATT) and the present
World Trade Organisation (WTO) were then established to provide the
institutional framework for a system of rights and obligations for trade in
goods and services between countries. Nations worldwide are currently
promoting trade liberalisation using various ways, multilaterally, regionally or
bilaterally.
Although the multilateral process of WTO is the best option for promoting
free and open international trade, there are many challenges/problems. One of
the common challenges is the difficulty in satisfying the interests of all
members in a large grouping. Besides, there is also a perception among some
developing countries that developed countries are using the WTO to gain
market access at their expense.
Since the pace of multilateral trade negotiations tends to be slow, there is a
tendency to move towards regionalism. Although the rise of regionalism is not
due entirely to slow pace of multilaterialism, regionalism has gained increasing
importance in international trade area. GATT had received 124 Regional Trade
Arrangements (RTAs) notifications over the previous 50 years. Most WTO
members are parties to at least one such agreement.
RTA is not new to most economies. Trade has been higher between adjacent
countries because traders are more familiar with markets that are closest to
their home base. This is one reason for the increasing number of RTAs.
As progress in multilateralism is rather slow, many nations would prefer to
go into regionalism and bilateralism than to spend efforts and resources on
negotiations in the multilateral context as it is easier and faster to resolve trade
issues.
Being a small economy, Singapore is heavily dependent on trade and trade
activities are important as a source of economic wealth. Hence, Singapore has
put the highest priority on free trade under the multilateral trading system
embodied by the WTO.

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Singapore also participates actively in regionalism such as the Association of

Southeast Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation
(APEC) to accelerate the momentum of liberalisation. In addition, the country
has also recently shifted to cross-regional trading pacts, commonly known as
Free Trade Agreements (FTAs).
Singapore wishes to undertake a pathfinder role and hopes to draw extraregional investments into Singapore and ASEAN through FTAs with ASEANs
key partners. Its intent is for its FTA route to be WTO-plus and not WTOsubstitute. The country also attempts to go beyond traditional tariff and nontariff liberalization so as to exploit opportunities in human resource
developments and knowledge-based economy. To date, it has successfully
concluded five FTAs with countries such as Australia, New Zealand, Japan, the
United States and the European Free Trade Association (EFTA).
Many nations worldwide have also moved into FTAs. Thailand, for
instance, has accelerated its move towards free trade by pushing hard for trade
pacts with various partners including Bahrain, Australia, China, India and
Japan. Malaysia is also looking at forging FTAs with countries such as Japan.
China and Japan. Even China, Japan and the US are interested to have FTAs
with ASEAN.
Although multilateralism is the best option for promoting free and open
international trade, alternative liberalisation paths like regionalism and
unilateralism may also be explored to ensure that like-minded trading
partners could accelerate their move towards trade liberalisation and be one
step closer to multilateralism. However, it is imperative that individual nations
assess their own political, economical, sociological and technological conditions, before choosing an approach to pursue trade liberalisation.

Brief history on the push towards world free trade

Trade liberalization began in the late 18th and early 19th centuries when the
doctrine of laissez-faire advocated, among others, the establishment of free
trade1. Free trade essentially means that trading activities across national
boundaries are not restrained by any government interference or regulation.
Although this ideology was accepted and practised in the earlier days, it was
later abandoned in 1932 after the great depression. Britain introduced a general
tariff and more countries followed the protectionist policies.
During the post world war era, the development strategies in most countries
revolved around the concept of catching-up2 through fostering of domestic
capacity. Foreign direct investment and trade were largely controlled and
limited in their scope unless they promoted self-sufficiency view by enhancing
the countrys domestic section. It is during the last fifteen years that these
countries shifted their industrial development towards export-led growth and
increased cross-border specialization and competition. The transition from the
deeply entrenched import-substitution policies to promoting economic growth

Source: http://www.foei.org/trade/activistguide/ideology.htm.
Source: Switching from Import Substitution to the New Economic Model in Latin
America: A case of not learning from Asia by Rajneesh Narula.

Challenges to multilaterism free trade agreements

123

through FDI and international trade involves opening up the economy and
trade liberalization.

Developments in trade liberalisation

Many countries recognised the importance of promoting international trade
through trade liberalisation. Post-war liberalisation has seen growth in world
trade, which has in turn stimulated foreign direct investment (FDI) and
contributed to economic growth. Since 1950 world trade has grown over
twenty-fold. Organisations like the General Agreement in Tariffs and Trade
(GATT) and later on, World Trade Organisation (WTO) were established to
provide the institutional framework for a system of rights and obligations for
trade in goods and services between them.
Trade liberalization, which brings about economic integration between
trading partners, has contributed to less corruption, more government
responsiveness, and improved quality of economic policies3. However, there
have been many changes in the approach towards trade liberalization. The
GATT, which was established in 1947, was designed to provide an international
forum between member states for reducing trade barriers and for resolving
trade disputes. Numerous rounds of negotiations were held to improve and
strengthen GATT. The last round of negotiation, Uruguay Round, has led to
the formation of the World Trade Organization whose main responsibility is to
monitor and enforce the international trade agreements.

Challenges to multilateralism
Although the multilateral process is the best option for promoting free and
open international trade, groups of countries are also engaged in various forms
of Regional Trade Arrangements (RTAs). As there are fewer countries
involved, RTAs are generally preferred. RTAs can be more acceptable
domestically than multilateral arrangements because they allow countries to
clarify sensitive sectors while integrating with countries that will not create
strong competitive pressures. However, there are fears that the growing
number of RTAs might divide the world economy into major trading blocs.
Besides RTAs, more countries are also recently engaged in bilateral trade
agreements. Trade liberalization has therefore taken new perspective of
regionalism and unilateralism. There are many reasons for such developments,
the main ones are described below.
Slow process
Due to the diverse make-up of industries and resources among the
countries, the GATT took many years to establish agreements on various
3

Source: Preferential Trade Agreements in Asia and the Pacific. Asian Development
Outlook 2002 by Asian Development Bank.

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Tan Song Chuan

aspects of trade. Since the establishment of WTO in 1995, the number of

members has been increasing. Unfortunately, the process of consultations
and negotiations is a long-drawn one. The lengthy accession process also
involves extensive review of the applicants trade policies and laws to ensure
conformity with WTO rules. Despite this process, many countries have
become WTO members hoping to achieve benefits of multilateralism in the
long run.
Unfortunately, the process in liberalisation within the WTO is extremely
slow. For example, the Doha Development Agenda (DDA) provided WTO
members a golden opportunity to liberalise markets worldwide and strengthen
multilateral rules. About 40% of the worlds population live in extreme
poverty, and their countries need much freer access for their exports. There is
therefore an urgent need to have substantial worldwide trade liberalisation.
Unfortunately the DDA has made very little progress to date.

Different expectations and perceptions of member countries

Many developing countries hope that the WTO would enable them to have
access to markets for their agricultural products and consumer products. On
the other hand, the developed countries introduce non-tariff barriers in the
form of unreasonably onerous food safety, technical and other standards that
have adverse effects on developing country exports. They also tend to
introduce regulatory overload and creeping standards harmonisation, artificially raising developing country standards to developed country norms. Yet
they are pressing developing countries to open up their markets for
investments and develop businesses. Hence, developing countries feel that
the WTO is being used by the developed nations to gain market access at their
expense.

Market access
Market access has been an important issue in most of multilateral discussions.
Although many countries have reduced their trade barriers in various goods
and services, the market access is still not completely liberalised. Developing
countries have not been able to gain entry into the markets of the developed
countries especially for products of vital importance to them. For example, the
EU and the US, although they have low average tariffs, retain very high tariffs
in agriculture, textiles and clothing, and other labour-intensive goods. These
are the very major sectors that are of vital export interest to developing
countries. Developed countries have not only tried to deny entry of such
products from developing countries but also certain of their actions have
created problems. High agricultural domestic subsidies and export subsidies in
the Organisation for Economic Co-operation and Development (OECD)
countries continue to massively distort trade and continue to create havoc in
developing countries markets.
Hence, developing countries are seeking other strategic trade agreements
which could help to solve some of these problems.

Challenges to multilaterism free trade agreements

125

Regional trading agreements

Multiple and complex interests, uneven development, unequal trading power
and divergent views on the scope of the future negotiating agenda in the
multilateral trading system are some of the contributing factors to the
accelerated development of regionalisation. RTA is a popular means of
liberalisation and there has been substantial increase in recent years. It has
been used as an alternative to globalisation, as was in the case for Latin
America in the 1960s and 1970s. The necessary understanding and compromise
among nations seem to be reached more easily when there are negotiations
among a smaller group of neighboring countries closely associated with each
other as compared to that of a larger group.
Regional integration can also be a building block for liberalising trade at the
multilateral level. Regionalism and globalisation are two processes that can
occur simultaneously. Hence, there is no objection from WTO in allowing
countries to engage in these agreements. At present, there are more than 200
RTAs and many are still in the negotiation process. More countries have
considered participation in RTAs in which benefits can be realized more
quickly According to Article 24 of the GATT, RTAs are allowed to be set up as a
special exception but members would need to meet the strict criteria set in the
agreement. In addition, regional trading arrangements are deemed to ensure
that trade flows more freely among the countries in the group and that barriers
are not raised on trade with those outside the group. However, as RTAs
become more attractive, effort and resources put into multilateralism might be
greatly reduced, resulting to delays or even a stoppage in its development.
RTAs are really not new to most economies. Trade has and will always tend
to be higher between adjacent markets, because traders are most familiar with
markets that are closest to their home base. The formation of a RTA is a logical
development. Furthermore, RTAs have been used as an effective policy
instrument to institutionalise and drive domestic reforms. A RTA does provide
a means of preparing the countries for greater trans-border exposure to the
benefits of market liberalization4.
Each of the RTAs is different from another in the types of goods and
services as well as the amount of reduction in the trade barriers. Some of these
RTAs have worked well while some have not made much progress. Below is a
short description of some of these RTAs.
European union (EU)
Being one of the earliest trade regions, EU has evolved from six members to its
current fifteen members. It is one of the most successful RTAs which involves
substantial international institutionalisation and has established common
market policies over the years since 1993. The high intra-bloc trade is one of
the main reasons for the success of this trade agreement and the removal of
trade barriers has improved economic welfare of its member states.

Source: Regionalism: A Singapore Perspective by Lim Chin Beng.

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However, the EU is a well protected market for agricultural products and

certain industrial goods. As a result, some of the products are no longer
competitive and this has affected the workers resulting in unemployment.
North America Free Trade Agreement5 (NAFTA)
NAFTA, which comprises the US, Canada and Mexico and formed in 1994, is
an extension of the United States-Canada agreement, which was signed in
December 1988. The U.S. wants Mexico in an agreement because as Mexico
develops it would be a vital platform for its exports. NAFTAs liberalization not
only affects trade, but it also affects service trade and investment regulations,
and regional programs that extend beyond trade to environment and
intellectual property rights. The purpose of NAFTA is to create an expanded
and secure market for the goods and services produced in the member
countries, to enhance the competitiveness of their firms in the global markets,
to create new employment opportunities and to improve working conditions
and living standards in their respective territories, as well as protect, enhance,
and enforce basic workers rights. When NAFTA was formed ten years ago,
there was a belief that Mexico would gain jobs and a new era of economic
prosperity was being ushered, allowing Mexico to leap from the Third World
into the First World. Thus far, NAFTA appears to have been a public policy
success as it has deepened and institutionalized Mexicos drive to modernize
and liberalize its economy and political system.
ASEAN Free Trade Agreement (AFTA)
The Association of Southeast Asian Nations (ASEAN) was formed in 1967
originally with five members. Subsequently other Southeast Asian countries
join, and the number is now ten. One of the aims of the Association is to
accelerate the economic growth, social progress and cultural development in
the region. In a move to achieve this aim, a Preferential Trading Arrangement
(PTA), which accorded tariff preferences for trade among ASEAN economies,
was made in 1977.
In 1992, a scheme toward an ASEAN Free Trade Area or AFTA, with the aim
to increase the ASEAN regions competitive advantage as a single production
unit, was launched. The elimination of tariff and non-tariff barriers among the
member countries is expected to promote greater economic efficiency,
productivity and competitiveness. In 1997, the ASEAN leaders adopted the
ASEAN Vision 2020, which called for ASEAN Partnership in Dynamic
Development aimed at forging closer economic integration within the region.
ASEAN cooperation could have resulted in greater regional integration and
covers the following areas: trade, investment, industry, services, finance,
agriculture, forestry, energy, transportation and communication, intellectual
property, small and medium enterprises, and tourism. However due to the

Source: NAFTA at 10: An Economic and Foreign Policy Success by Daniel T. Griswold.

Challenges to multilaterism free trade agreements

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Asian financial crisis and ongoing reforms, some ASEAN countries are unable
to hasten trade liberalisation and economic integration.

Path to unilateralism
As trade increases in importance in the world economy, more countries would
enter into multilateral trade arrangements. But since the process of accession
to WTO is usually extremely onerous, particularly for transition economies
and least-developed countries6, these countries would search for a more
appropriate mechanism or instrument to expedite the increase and flow in
trade. Hence, they also establish closer ties with like-minded countries by
entering into PTAs and Free Trade Agreements (FTAs).
PTAs are agreements between two or more countries in which tariffs on
goods produced in the member countries are lower than on goods produced
outside. FTAs are PTAs in which tariffs are eliminated entirely on the goods
produced in member countries, but countries maintain their own tariff
structures with non-members. FTAs are expected to enhance the flow of goods,
services and human resources. Some of the benefits of FTAs include facilitation
of customs procedures, improvement in market access for certain commercial
and professional services, easy entry for businessmen into other countries, and
better terms for investment in foreign countries.
Both PTAs and FTAs can therefore be regarded as expeditious instruments
for achieving trade liberalisation among like minded trading partners (Schiff
et al. 2000). Formation of bilateral FTAs among partners is also seen as a way
to overcome the so-called convoy problem whereby the least willing member
holds up the pace of trade integration7. These agreements could serve as
commitment mechanisms for policy reform, particularly non-tariff reforms
such as investment policies or regulations. They provide short-term opportunity to experiment with different sets of rules relating to non-tariff barriers.
PTAs and FTAs can help countries prepare for WTO accession through
learning and by pooling resources. Developing countries, particularly smaller
countries could be better prepared for negotiations in the multilateral setting,
as PTAs/FTAs could be both a training ground and an information-sharing
opportunity. Continued interaction and sharing of information among the
member countries of the agreements could also help facilitate global trade
negotiation as each group would have agreed in advance on a negotiating
position by working out compromises among themselves.
While trade opening via PTAs and FTAs would be enough to satisfy groups
that benefit from freer trade and access to greater product variety, the danger is
that pro-trade groups would thus lessen their lobbying efforts at further
multilateral liberalization. In a way, PTAs/FTAs envisage a future in which the
world may be divided itself into several large trade blocs with little incentive to
pursue further multilateral liberalisation.

Michalopoulos 1999.
Source: Singapores New Commercial Trade Strategy: The Pros and Cons of Bilateralism
by Ramkishen S. Rajan and Radhu.
7

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Tan Song Chuan

To date, the WTO has received notification of 30 multilateral PTAs and 58

bilateral arrangements. Most are currently PTAs aspiring to evolve into FTAs
(rather than customs unions) as the formation of an FTA on a common
external tariff structure is less demanding than that of customs union and
agreement.

Singapores participation in free trade agreements (FTA)

Being a small and open economy, Singapore has been a strong proponent of
multilateralism and has removed most tariffs and quotas since 1960s. In the 1980s
and 1990s, she has actively pursued a second track to liberalization via the
regional route by her participation in the AFTA. AFTA has progressed well until
the Asian Financial crisis in the mid-1997. There were indications that this event
has held up the pace if not commitment by some members to trade
liberalization8. Before the member countries could recover from the crisis, the
September 11 and the SARS incidents continued to divert their attention away
from the pending trade issues. The lesson from the regional crisis has reinforced
her development strategy towards better integration with other like-minded
economies. Hence, Singapore has shifted to cross-regional trading pacts or FTAs.
She hopes to draw extra-regional investments into Singapore and ASEAN
because there is an urgent need for ASEAN to strengthen external linkages.
ASEAN needs to go even further in economic integration in services which
is the key to regions future growth because ASEAN must respond to the rapid
changes in East Asia and push ahead with greater integration of East Asian
economies. This will put ASEAN in a better position to respond to the
formation of large economic blocs in Europe and the Americas. In addition,
ASEAN has to deal with the challenges and opportunities posed by a rising
China. ASEAN should urgently restructure its economies and integrate them
more deeply so that it can increase its share of FDI in East Asia.
Singapores bilateral arrangements are not meant to undermine ASEAN.
She hopes by conscientious adherence and operation within the WTO and
multilateralism, she may convince other economies to the new global and
regional environment to wed new regionalism with multilateral free trade.
There is, therefore, an urgent need for ASEAN to strengthen its external
linkages. This urgent need for ASEAN to strengthen its external linkages
explains why Singapore has embarked on a strategy to conclude FTAs with
ASEANs key partners. Singapore hopes to play a pathfinder role. Her FTAs
with Australia, New Zealand, Japan and USA will not only strengthen the long
and deep linkages with these developed economies, but also evolve into
ASEAN-wide FTAs9.
Singapores intent is for its FTA route to be WTO-plus and not a WTOsubstitute. The country has no intention to act ultra vires or be inconsistent to
ASEAN or the WTO which allows multiple membership in more than
one regional trading arrangement. All her bilateral free trade agreements are
8

Source: Singapores New Commercial Trade Strategy: The Pros and Cons of Bilateralism
by Ramkishen S. Rajan and Rahul Sen.
Keynote address Deepening Regional Integration and Co-operation by PM Goh Chok
Tong at the WEF East Asia Economic Summit 2002, 8 Oct 2002, Kuala Lumpur, Malaysia.

Challenges to multilaterism free trade agreements

129

WTO-consistent, requiring the WTOs exemption from most-favoured nation

under GATTs Article XXIV, the enabling clause or General Agreement on
Trade in Services Article V. Neither is Singapore abrogating or reneging on its
ASEAN commitments. Despite Singapores spate of bilateral free trade
agreements, she does not detract from her commitments in ASEAN.
Furthermore, bilateral free trade agreements are also open to other ASEAN
members willing to undertake the necessary commitments and obligations.
Prime Minister Goh has, in fact, welcomed ASEAN partners to join when they are
ready to forge free trade agreements of their own with their trading partners10.
FTAs are now an integral part of Singapores trade policy. Since 2000,
Singapore has concluded FTAs with New Zealand, Japan, European Free Trade
Association, Australia, and US. The objectives of the broad-ranging trade pacts
with US and Japan are to gain greater market access, to avoid imposition of
future protectionist measures, and to manage future trade tensions including
establishing orderly dispute settlement mechanisms. Most importantly, Singapore seeks to anchor the flow of investment to Singapore as well as to ASEAN.
The US-Singapore FTA signed in May 2003 would add about US $20 billion
in new economy activity over the next 5 years between the two countries. The
US is the largest investor in South-east Asia and the biggest export market for
the region. According to the US Department of Commerce, US investments in
ASEAN have risen to US $50 billion. ASEAN is the third largest overseas
market for the US after NAFTA and Japan. The US-Singapore FTA strategically
complements ASEAN and US treaty relationship, giving the US a foothold in
the emerging East Asian regionalism, and thus placing the US in a unique
position to influence East Asian events and developments. The US-Singapore
FTA will therefore lead to more FTAs between US and ASEAN countries, as
indicated by President Bushs intention to start FTA with Thailand during the
forthcoming Asia-Pacific Economic Cooperation (APEC) summit to be held in
Bangkok from 2021 October.
The Japan-Singapore Economic Partnership (JESPA), a bilateral economic
integration11 between Singapore and Japan, would play a strong complementary role to the efforts of the multilateral trading system. It would provide a
platform for Japan and Singapore to go beyond current WTO developments.
The JSEPA would not only have a direct impact on Japan-Singapore bilateral
relationship, but would also strengthen Japans involvement in, and commitment to, Southeast Asia for the long term, to the benefit of both Japan and
ASEAN countries. The JESPA has been viewed as a precursor to the formation
of an East Asia-wide FTA between ASEAN plus Japan, Korea and China.
The second group of Singapores FTAs partners comprises of New Zealand,
Australia, Canada, Chile, Mexico, among others. Although these countries
individually do not account for more than 3% of its total trade, Singapore aims to
seek out new markets in view of the seeming loss of growth momentum in
Southeast Asia. In addition, Singapore aims to diversify its external linkages so as
to reduce its vulnerability to regional spill-overs as well as to maintain visibility
and economic vigor. In a broader view, Singapores FTAs could serve as
templates to include ASEAN into FTAs with these countries.
10
11

Source: Straits Times, 9 May 2001, p. 1.

FTA plus economic cooperation.

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Tan Song Chuan

It has been suggested that Singapores FTAs with US, New Zealand, and
Australia and later on, Chile may lead to a Pacific-5 or P-5 FTA, which could be
a precursor to an APEC-wide FTA.
Singapore is also involved in ongoing FTA discussions with Mexico,
Canada, India, Jordan and Korea. The next move is to bring these partners
even closer to APEC-Plus status where APEC members could engage in a
trade agreement.
Besides Singapore, other ASEAN countries are also planning to engage in
new trade agreements. Thailand has signed its first FTA with Bahrain and this
can be a gateway to all the Gulf Cooperation Council countries. Thailand is also
in the process of signing a bilateral free trade agreement with China on
vegetables and fruits within this year and with India on machines, electric
machines, equipment and related parts. In addition, two other countries that
Thailand is still finalising the free trade agreements are Australia and Japan.
Malaysia is also looking into forging a FTA with Japan as it is determined to
maintain its Look-East policy of learning from the rest of Asia.

Asean free trade agreements

ASEAN-China FTA
In November 2001, China and ASEAN agreed to pursue the ASEAN-China FTA
within 10 years. There are many economic complementarities between China
and ASEAN. ASEAN is much more cost-competitive than China in agriculture
and some raw materials. China is already the largest and fastest-growing source
of revenue for ASEANs largest tourist sector. When the FTA is realised, it will
create the single largest FTA in the world with a combined population of 1.7
billion. It will have an aggregate GDP of almost US $2 trillion and two-way
trade worth US 1.2 trillion12. Five areas are being considered for economic
cooperation viz: agriculture, information technology, human resources, direct
investments and the development of the Mekong River basin.
ASEAN-Japan comprehensive economic partnership (AJCEP)
In November 2002, Japan and ASEAN leaders decided to endorse a
recommendation to start negotiations on an ASEAN-Japan comprehensive
Economic Partnership, which includes elements of a FTA. The complementary
nature of the ASEAN and Japanese economies and the accumulated huge
investments of Japanese firms in ASEAN will enable the AJCEP to deepen the
relationship between ASEAN and Japan. While both the ASEAN-China FTA
and the AJCEP are building blocks for an East Asian FTA in the long run, the
AJCEP building block is the corner stone of the process13.

12
Source: ASEAN tie-ups offer US a foothold in East Asia by Lee Yock Suan,, Asia Society
Dinner, Texas, Nov 1st 2002.
13
Dr. Mohamed Ariff, Malaysian Institute of Economic Research.

Challenges to multilaterism free trade agreements

131

USEnterprise for ASEAN

At the APEC Leaders Meeting in Los Cabos, President George Bush announced
the launch of the Enterprise for ASEAN Initiative (EAI). The US is a key
ASEAN dialogue partner and has a solid economic presence in Southeast Asia.
The ultimate objective of the EAI is a network of bilateral US-ASEAN FTAs.
Viewed against the ASEAN-China FTA and ASEAN-Japan CEP, this US
initiative will complete the triangular equation of strategic balance between the
three powers in South-East Asia. It will also give a major boost to ASEANs
outward-looking strategy of pursuing deeper economic integration including
through closer linkages with its major trading partners14.

Future of free trade agreements

As long as there is no major breakthrough in the WTO multilateral dialogue,
more countries will be taking the bilateral trade agreement route to achieve
economic growth. As the moves on Free Trade Agreements gain momentum, the
number will continue to increase while the existing ones are likely to expand. The
trade arrangements could become future template for multilateral discussions
provided that the existing and ongoing FTAs and RTAs are WTO consistent.
The agenda for the next WTO Ministerial Conference in Cancun builds on
the Doha agenda. Progress in various WTO negotiations has been slow. It is
still difficult to integrate the least developed countries (LDCs) in the
multilateral trading system as the countries are at different stages of economic
development and possess different level of resources to engage in these
negotiations. The capacity building and anti-dumping matters have to be
resolved. In the coming meeting, market-related issues such as duty and quota
free access of goods from the LDCs to the developing world would be high on
the agenda. Among other things, the LDCs need market access most and would
prefer that to foreign aid.

Conclusion
Although the aim of WTO is to provide a platform for multilateral negotiations
to achieve trade liberalization, the progress has been slow due to the reluctance
of the least developed countries as well as the developed countries in providing
unrestricted market access. Trade agreements, regionally or unilaterally, will
continue to proliferate as long as there is no breakthrough in the negotiations.
Not only will there be more trade agreements, these trade agreements will
comprise of more members and there might more collaborations between two
or more RTAs. These trade agreements may provide the countries better
market access as well as more benefits from international trade.
Essentially, there is no right or wrong and hard-and-fast rule for the move
towards trade liberalization. Although multilateralism is the best option for
14

Source: Speech ASEAN Tie-ups offer us a foothold in East Asia by Lee Yock Suan, Asia
Society Dinner, Texas.

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Tan Song Chuan

promoting free and open international trade, alternative liberalisation paths like
unilateralism and regionalism could also be explored to ensure that likeminded trading partners can accelerate their move towards trade liberalisation
and be one step closer to multilateralism. However, it is imperative that
individual nations assess their own political, economical, sociological and
technological conditions, before choosing an approach to pursue trade liberalisation.

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Websites:
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http://www.foreignpolicy-infocus.org