The GATT/WTO Participation and Asia-Pacific Regional Trade: Long-Term Effects?

Abstract

The purpose of this study is to assess the impact of participation by Asia-Pacific countries (APCs) in the General Agreement on Tariffs and Trade/World Trade Organization (GATT/WTO) on their reciprocal trade from 1993–2021. The reduction of various barriers due to the APCs’ participation in the GATT/WTO, as well as in trade agreements, has contributed to the fact that, over the past three decades, trade in the Asia-Pacific region (APR) has become predominantly intra-regional. The estimates obtained by the author point to the long-term, positive impact of membership in the GATT/WTO on the trade of the APCs, explaining the dominance of the effect of globalization over the effect of regionalization. The processes of globalization and regionalization in the APR were neither conflicting nor complementary to each other. The estimates developed by the author show that the effects of the APCs’ participation in the GATT/WTO contributed to an increase in intra-regional trade by 129% and to an 11% increase in the entry into force of trade agreements. The results also show that bilateral (direct) participation of APCs in the GATT/WTO led to an increase in intra-regional trade by 46%, and unilateral (indirect) participation – by 110%. These results prove the importance of countries’ participation in the GATT/WTO for creating a relatively free area for trade in the APR, reducing various restrictive measures and intensifying intra-regional trade. Estimates of the border effect confirm the reduction of total barriers in interactions between the APCs in the long term. The article shows that the discussion and creation of various trade formats, including the largest in terms of coverage of the participating countries, on the one hand, can contribute to the fragmentation of the trade and economic system of the APR; on the other hand, it creates conditions for further liberalization of trade relations, complementing the functions of the WTO. The author suggests that participation in the WTO may allow Russia to use the mechanisms of globalization to discuss the easing of restrictions, as well as to increase trade with countries that do not implement strong restrictions on the Russian economy, including some of APCs