Multilateral or Bilateral?
Recent flurry of bilateral and regional trade agreement brings the issue of multilateral versus bilateral trade agreement to the fore front in a fundamentally shifting global economy. Some of the recently concluded are Japan-Thailand and US-S. Korea FTAs. Japan has shown interest in FTA with US in response to US – S. Korea agreement. There are 220 odd such agreement in existence today and it is expected to scale up to 400 by turn of this decade. Let’s take step back to understand the role played by such an agreement in fostering freer global trade in a globalizing world. With the establishment of GATT after world war II, the multilateral approach was the preferred method of trade liberalization. WTO was brought into existence after GATT to fix the anomaly resulting from special treatment allowed under GATT for its member nations to subsidize production or agriculture and export & limit market access.
This practice ultimately resulted in decrease......
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