Bilateral trade agreements come in handy

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: as development assistance and freer market access and gain a point over other competing WTO members.

It is well known that Asia has emerged a key player in the global trade ecosystem. The World Bank expects global economy to grow at a much faster pace in the next three decades as compared to the previous three as large developing countries such as India and China witness high growth and integrate with the rest of the world at an unprecedented pace. Their share in the global output of the developing countries is expected to increase from the present fifth to a third in the next 25 years.

While integrating with the global trade and production system, Asian economies have also deeply integrated regionally. Intra-regional trade in East Asia makes 55% of the region’s total trade that is up from 35% back in the 1980s.

As compared to the US and Europe, Asia was a latecomer in the pursuit of regional trade agreements or FTAs as an instrument for trade policy. Asean was the only significant regional trade pact in existence before 1998. Since then there has been a dramatic proliferation of FTAs and there are more than a dozen in existence in East Asia today and twice that number is already under negotiation.

This was also a result of dissatisfaction with the progress on global trade talks and the ‘left behind’ syndrome. Regional trade agreements and FTAs have kept the torch of trade liberalisation burning in spite of breakdown in discussions on the global trade agreement. This is of paramount importance as the world enters into a paradigm shift in its trade pattern, while protectionist sentiments are expected to strengthen further.