A World Trade Organization for the 21st Century: The Asian Perspective

Abstract

A World Trade Organization for 21st Century: The Asian Perspective. Edited By Richard Baldwin, Masahiro Kawai and Ganeshan Wignaraja. Cheltenham, UK and Northampton, USA: Edward Elgar, 2014. Pp. 429. As an increasing proportion of world economic activity shifts to Asian continent and various regional trade agreements proliferate, a book focusing on future role of World Trade Organization (WTO) is a delight to any intellectual mind aspiring to dig deep into issues related to international trade. The book touches upon all issues that are central to shaping current global trade architecture. It specifies that governance of international trade in present day has to address the intertwining of trade, investment, intellectual property and --something that has not been able to address convincingly till date. The chapters of book may be roughly divided into four groups. Although book does not divide these groups explicitly, a brief roadmap is provided in introductory chapter. To address changing paradigm of international trade, first group (Chapters 2 and 3) define concept of value-added trade and supply chain trade, an issue that is particularly relevant while talking about trade in East and Southeast Asia. The challenges of not having kept up with changing times and need for WTO 2.0 are mentioned. In second group, Chapters 4 and 5 deal with question of firm level determinants in joining global supply chain, and industrial policies to facilitate trade in value chains. The question of firm size as a determinant to join a supply chain is investigated rigorously and results are shown to vary by region across East and Southeast Asia. The role of investment in technology and technology upgradation stands out as a significant determinant. The role of government in formulating policies to facilitate small-medium enterprises (SMEs) joining supply chain is postulated. It concludes that a strong role of government in infrastructure development in close coordination with private actors is most suitable. In third group (Chapters 6 to 10), focus shifts to policies relevant for international transactions. Specifically, Chapters 6 and 7 analyse exchange rate policies and responses to economic crises through protectionism. The protectionist stance taken as a reaction to recent financial crises is found to have been higher in developed countries than developing ones in Asian region. The style of protectionism is also outside governing areas and span areas of discrimination against foreign firms, services and workers, just to name a few. On exchange rate policies, trend across partners in a Free Trade Agreement (FTA) of maintaining stable currencies amongst FTA members is observed, highlighting distortionary effects on trade outside bloc. This is followed by analysing trends towards regional integration through policy challenges in context of Asian FTAs and mega regional trade agreements (RTAs) like Regional Comprehensive Economic Partnership (RCEP). The pivotal role of Rules of Origin (ROO) in context of any FTA in determining preference given to FTA members is analysed while addressing other challenges of integrating famous Asian noodle bowl effect. The prospects of ASEAN Economic Community (AEC)--the impediments and integrating factors and its effects--are further discussed. …