ABSTRACT
For most of the last half century, western Pacific countries largely eschewed preferential trade agreements (PTAs).2 As countries that had been the principal victims of discriminatory regional arrangements elsewhere, most notably in Europe, and whose economies had unusually diversified export markets, their preferred form of trade liberalization was unilateral action on a nondiscriminatory basis, an approach adopted by the region’s most comprehensive grouping, APEC, as its original modus operandi.3 At the end of 2001, only China, Hong Kong, Japan, Korea, Mongolia and Taiwan among the WTO’s 144 member economies were not parties to discriminatory trade agreements. By this date, however, all the East Asian countries were included in one or more proposals for bilateral or multilateral PTAs. In the previous three years, more than twenty such schemes involving western Pacific countries had been put forward.4 Contrary to Baldwin’s prediction at the head of this article, western Pacific countries appeared poised to jump on the bandwagon of discriminatory trading. Why have these countries apparently changed their approach to trade liberalization? What are the likely effects of the proposed agreements? These are the principal questions that this chapter seeks to address.
