Economic and strategic dimensions of mega-FTAs: A perception survey of Asian opinion leaders

• Main Authors: Ji, Xianbai, Rana, Pradumna Bickram, Chia, Wai-Mun, Li, Changtai
• Other Authors: S. Rajaratnam School of International Studies
• Format: Working Paper
• Language: English
• Published: 2017
• Subjects: Country and Region Studies; East Asia and Asia Pacific
• Online Access: https://hdl.handle.net/10356/83748; http://hdl.handle.net/10220/42808
• Institution: Nanyang Technological University

The advent of mega-free trade agreements (mega-FTAs) including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the Transatlantic Trade and Investment Partnership (TTIP) is a defining feature of global trade governance in the 21st century. What are the costs and benefits of mega-FTAs? What is the political and strategic calculus behind mega-FTAs? Is there a “domino effect” triggering off the mega-FTA troika in a chain of reactions? Does mega-regionalism reinforce or undermine multilateralism? Since commonly used econometrics models cannot shed light on non-economic issues, this paper examines mega-regionalism by conducting a perception survey. This survey received responses from 648 opinion leaders located in 31 Asian countries. Respondents felt that mega-FTAs are good trade policy instruments that are “building blocks” to multilateralism. Linked by a “domino effect”, the mega-FTAs have important political and strategic dimensions. The United States wants to socialise China by writing high-standard “rules of the road” through the TPP. China then pivoted to RCEP to counter the TPP. Brussels through TTIP wanted to join the mega-FTA bandwagon to stay relevant. Additionally, remaining questions on decentralising global economic architecture highlight the need for regional and global institutions to complement each other.