Abstract

After decades of focusing largely on multilateral trade rules, the past fifteen years witnessed a surge of free trade agreements by East Asian governments. Regional production networks benefit from harmonization of rules and lowering trade barriers. Yet several features stand out in these agreements—they focus on goods trade and are not embedded in strong regional institutions for shared decision making. This reflects both the divergent preferences among widely different countries and the reluctance of Japan or China to advocate any policies beyond liberalization of trade and investment. The TPP broke the mold of East Asian PTAs largely due to the leadership of the United States, which pushed others to adopt new rules on labor, environment, digital trade, state-owned enterprises, and competition policy. Yet, surprisingly, these features may persist in trade law despite the exit of the United States from the agreement. A key reason is the transformation of Japan, which began as a bystander to the agreement and now stands as one of its strongest advocates. A second reason is the use of templates in trade agreements, which can transfer the negotiated terms from one deal into subsequent agreements.

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