Multilateral Regionalism and Emerging Markets – Opportunities and Risks in Global Trade
The world of international trade is changing in a way that has so far been unseen in scale and depth. With more and more regional and mega-regional free trade agreements under consideration, global markets are splitting up into fewer, larger, and more powerful trading blocs. The developed countries participating in these agreements expect large increases in trade volume and increases in income due to lower tariffs and the removal of non-tariff barriers. The effects of these agreements on emerging markets, however, are less clear.
Agreements like the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP) are likely to divert trade away from non-participating countries, especially those which qualify as emerging market economies. However, the same agreements also may affect emerging market economies through indirect spillover effects; effects that may arise if non-participating countries adopt the common standards prevailing in larger trading blocs to lower non-tariff barriers. Adopting these standards may allow emerging market economies to at least partially integrate themselves into the otherwise exclusive trading blocs.
As a result, the content and inclusiveness of these agreements matter, along with the subsequent reactions of emerging markets. Important emerging markets, such as China, are already weighing whether they wish to pursue a closer affiliation with them or instead whether they want to counter the new regional trade agreements by establishing their own competing trading blocs. As these countries decide how to respond, it becomes increasingly clear that their response will shape the form of global trade in the 21st century.
Given this challenge, this GES session addresses the following questions:
- How can mega-regional trade agreements foster positive economic and social development in emerging market economies?
- What steps need to be taken by developed countries to ensure positive outcomes for themselves and for emerging market economies?
- How can free trade lead to fair trade in this context?
- How does the World Trade Organization (WTO) need to be reformed in order to encourage this process?
- How will China react to TTIP and TPP, and how will its reaction affect the Asian community as a whole?
This session is organized by the Bertelsmann Stiftung. Please check out the tabs below for additional facts and information.