International production networks and required new global governance: mega-FTAs and the WTO

Abstract

The conclusion of negotiations over the Trans-Pacific Partnership Agreement (TPP) in October 2015 instigated a change in the landscape of the international economic order. Its domino effects were eminent, and a number of countries expressed their intention to participate in the TPP. Moreover, other mega-FTA negotiations seem to have been influenced by the TPP such as the Regional Comprehensive Economic Partnership (RCEP), the China-Japan-Korea FTA, the Japan-EU EPA, and the Trans-Atlantic Trade and Investment Partnership (TTIP). The current trade turmoil initiated by the US trade policy rather enhances the value of mega-FTAs. It has now become a real possibility that mega-FTAs will become a vehicle to develop a novel international economic order by showing a new standard of liberalization and a prototype of new international rule. Some of the international rules initiated by mega-FTAs may well be developed in the form of new plurilateral agreements under the auspices of the World Trade Organization (WTO). This paper discusses the prospects of new global governance in trade and investment.