Contemporary Trade Regionalism on the Example of Free Trade Area of the Asia-Pacific (FTAAP)

Abstract

The Free Trade Area of the Asia-Pacific (FTAAP) is a trade framework proposed during the meeting of Asia-Pacific Economic Cooperation (APEC) in Beijing in 2014, however, proposal was given initially in Hanoi in 2006. It may be considered as manifestation of mega-regionalism in trade, an attempt to set the rules of trade in the twenty-first century at the expense of multilateralism under the auspices of WTO, but also to overcome noodle bowl effect in the Asia-Pacific region. The main objective of the chapter is to study the project of FTAAP, using the concepts of trade regionalism and mega-regionalism, its genesis, economic, and political implications. As indicated by author, next to geographic scope of FTAAP, there is a concern resulting of the fact, that the concept of creating a free trade zone, a de facto mega-regional grouping, does not fully coincide with the concept of regional liberalization based on regulations promoted over the years by APEC and WTO rules. The same applies to the concept of open regionalism underlying the APEC. Author concluded that a hybrid approach and multitiered system might be a solution to enable individual states to proceed with convergence toward higher standards and gains, considering diversity of APEC member states. Alternatively, FTAAP could be made as an evolutionary agreement, while not excluding the possibility of the US membership inside a single framework with China.