Mega-regional Agreements Research Articles

Unpacking the impact of mega-regional agreements: the EU–Mercosur case

Mega-regional trade agreements progressively became a mechanism for the European Union (EU) to include a wide range of commitments in interregional negotiations. There is a well-developed scholarly debate on the EU’s normative power, but we have not seen a similar weight of research on how third countries react to European influence. We suggest that the focus on the macro analysis of state-level interests hides that domestic groups are impacted by EU rules and mobilise to respond to what is perceived as an imposition of European norms. This article explores the EU–Mercosur Agreement and, considering the pivotal role of Brazil in potentially obstructing it, we conducted documentary research to analyse how Brazilian stakeholders have reacted to the EU norm-spreading. We mapped influential individuals and organisations engaged in disclosing their positions and influencing the negotiation outcome. The results demonstrate that while supporters are those directly benefiting from trade liberalisation, opposition comes mainly from sectors impacted by the beyond-trade norms.

Preferential Trade Agreements, Geopolitics, and the Fragmentation of World Trade

AbstractFailure to reestablish an effective World Trade Organization (WTO) dispute settlement procedure, stop the erosion of multilateral rules and end the China–US trade war causes capitals to rethink trade policy. One response is to redouble efforts to strike trade agreements with major trading partners. Already countries accounting for about 78% of world Gross Domestic Product (GDP) are members of mega-regional agreements, and based on our computations, preferential trade agreements (PTAs) will soon cover about two-thirds of world trade. Can PTAs replace a fading WTO or mitigate its effects? Amid deepening geopolitical rifts, how will trade relations among China, the EU, and the US, each a hegemon in their respective regions, evolve, and what will be the impact on smaller economies? In short, how will a trading system based increasingly on PTAs and weak multilateral rules look, and how will nations adapt? Absent reforms, the trading system is likely to fragment progressively into regional blocks organized around the hegemons. Trade within the regional blocks, mainly conducted under a mega-regional agreement, will likely remain quite open and predictable, but without strict multilateral rules and where PTAs are absent (as they are among the hegemons), interregional trade relations will become increasingly uncertain and unstable.

‘Regionalism’ and the global trade system

AbstractThe post‐1945 global trading system was designed around the principle of non‐discrimination. During the 1947–94 GATT era, regionalism and multilateralism were often viewed as antagonistic approaches to international trade, and preferential treatment within regional blocs was to be deterred. Since 1995, although regional trade agreements are monitored by the WTO Secretariat and presented as a threat to the system, regionalism poses little threat to the multilateral trading system. This paper argues that major twenty‐first century RTAs go beyond preferential tariff treatment to focus on deeper integration issues. Such issues are addressed outside the WTO because, despite new features of the international trade map since 1995 such as Internet use and global value chains, extension of WTO rules has proved difficult due to the requirement for consensus. The paper analyses the rise of megaregional agreements such as CPTPP and RCEP, the shift in EU policy from protecting domestic producers to facilitating imports from best global suppliers and the use of WTO plurilateral agreements within the context of providing rules fit for purpose in the modern global trading system.

ОСОБЕННОСТИ ФУНКЦИОНИРОВАНИЯ МОДЕЛЕЙ ТОРГОВО-ИНВЕСТИЦИОННОГО ВЗАИМОДЕЙСТВИЯ СТРАН В РЕГИОНЕ ЮГО-ВОСТОЧНОЙ АЗИИ И НА ПОСТСОВЕТСКОМ ПРОСТРАНСТВЕ

The article examines the development trends of models of trade, investment and economic integration in the region in Southeast Asia and the post-Soviet space. Particular attention is paid to new trends in the escalation of multilateral trade agreements. Such agreements, which previously used the WTO platform, are increasingly beginning to act as its alternative. In this regard, the issues of mutual influence of participants due to the development of trade, investment activity, the location of production of TNCs, the optimization of economic activities in the light of digitalization, the development of e-commerce, logistics, banking technolo-gies are increasingly regulated by mega-regional agreements. The complex activity of overcoming trade bar-riers by such different countries within the framework of the mega-agreement and their readiness to consist-ently increase the level of trade and investment interaction between the participants are undoubtedly one of the features of modern Asia-Pacific regionalism. As the largest trade and integration bloc in the post-Soviet space, the EAEU is becoming a platform for promoting the geopolitical and economic interests of its members in the foreign policy space. Currently, the EAEU is the only functioning integration association promoting the interests of the union with third countries, including in the East Asian direction.

Technical Assistance As a Hedge to Intellectual Property Exclusivity

This article develops the connection between neo-colonialism and IP. The TRIPS Agreement and other hard norms such as TRIPS-plus bilateral treaties concluded between the EU, the USA and developing countries further contribute towards such neo-colonial control. Even so, an often overlooked but important aspect of such control is that once these treaties have been concluded, the EU, the USA and other co-opted international organizations such as WIPO actively offer technical assistance. The policy of technical assistance has often been criticized for introducing levels of IP protection that are mostly inappropriate for the social and economic development of developing countries. This chapter argues that technical assistance – as a third layer of norms, in addition to existing multilateral, mega-regional and bilateral agreements – has become the ‘new informality’ emphasized in the new constitutionalist literature. Technical assistance programmes further hedge IP exclusivity by creating an elite IP community in developing countries that sees things through the dominant industrialized-country approach, effectively leading to epistemic lock-in. Technical assistance, therefore, functions as a facilitator of the constitutionalization of IP rights.

Reformatting Global Economic Governance in Conditions of New, Mega-Regional Integration

The current study focuses on the transformation of global economic governance in the light of current globalization processes, which are characterized by the emergence of new players on the world stage as a result of a qualitative change in the phenomenon of regionalization of the world economy. The relevance of the study is justified by the fact that the various modes of global economic governance coexist (starting with the quasi-hierarchical system of supranational organizations and ending with network forms of dissipative governance), where mega-regional integration is one of the attempts to achieve economic development which goes far beyond national borders. In this context, mega-regional integration can be seen as the basis for actualization or one of the modern tools of global economic governance.
 According to the stated goal, the article considers the prerequisites of new mega-regional integration from the point of view of the current crisis of multilateralism as well as the economic potential for creation and functioning of mega-regional agreements. Based on the research results of such domestic and foreign scientists as: Reznikova N.V., Malyuta A.I., Pashchenko O.V., Sheargold E., Juutinen M., Sandrey R., Bown Ch.P. et al.it was possible to conclude on the unprecedented scale of mega-regional agreements and to question the effectiveness of modern methods of achieving inter-state consensus and global goals.
 The article deals with the main MRTA /MRU: BRICS, TTIP, TPP, RCEP and SCO, and explores the global goals of these associations. The prevalence of a hybrid form of global economic governance in the context of mega-regionalism is shown, namely, mega-regional integration groups combine efforts of different states in the form of "block – block", "country – block" and “countries-global leaders”. The complementarity of MRTA /MRU functioning to the existing forms of global economic governance is argued. The further research in this sphere is suggested, it should be related to exploring the prospects of economic development of mega-regional unions and of cooperation of Ukraine with them.

Changing modes of global economic governance: from neo-liberalism to neomedievalism

The system of global economic governance, as well as the global economy itself, is in the state of unceasing change. The concept of the architecture of the global economy, which is always identified with the existence of quasi-hierarchical structures of subordination of global economic potentials, shows its failure in modern conditions. It is shown that the modes of global economic governance have evolved substantially since the postwar period, which is equally true for all its spheres (trade, finance, migration, etc.). The analysis of the dynamics of changes in the regimes of global economic governance and the characteristics of the system allowed to draw several conclusions. During crises, institutions or leading states play a bigger role because of the need to achieve faster consensus, the availability of resources to solve problems, and better institutionalization. It is proved that the periods of change in the modes of global economic governance are shrinking in line with the reduction of the periods of global economy development. There is a transition from simple multilateralism on the background of neo-liberalism to hybrid forms attributed to the neo-medievalism. The results of the study show that the cyclicality in the replacement of the leading actor of global economic governance takes the next form: governments, integration regional unions, non-governmental organizations (producers) (intergovernmental organizations, international value networks, mega-regional agreements, respectively), which allows predicting changes in the modes of global economic governance. It is proposed that at the present stage it is worth considering separately the modes of global economic governance in its various spheres due to the lack of unified methods and mechanisms for solving global economic problems. One can observe a shift towards hybrid forms of governance based on negotiations, consensus, etc in all the spheres of global economic governance. The corresponding research can be supplemented by the analysis of cyclical patterns of global economic governance.

Reviewing perspectives on third-party impacts of mega-regional trade agreements: implications for Brazil

ABSTRACT The present review article examines the potential impact of mega-regional trade agreements on Brazil as a third-party. The literature initially reviewed identifies the “deep regulation” proposed in mega-regional agreements as an expression of structural changes within the global trading system, which in spite of the current stagnation of these negotiations highlights the relevance of scrutinizing their potential implications for outsiders. The article subsequently examines projections made of the short- and intermediate term economic impacts of this type of trade agreement on Brazil as a third-party, and here upon engages with perspectives treating their long-term structural implications.

The Demise of Multilateralism and the Rise of Sovereignty?

International agreements are negotiated by sovereign states and by signing these agreements they agree to be bound by them. States know this when they conclude agreements but sometimes the end-effect and implications of these limitations on their capacity to act internally, is only realised much later. In international trade, comparative advantage is the economic theory underlying liberal trade whereas, in comparison in international law the organising principle is the sovereignty of states. These two concepts are mutually exclusive. In terms of the sovereignty principle, states are meant to follow and protect the national interest, this is not allowed in the international trading system where equal treatment is required between nationals and foreigners and national products and foreign products. Thus, the two are at variance with one another. Pursuing national interest can be seen to amount to protectionism and within the international trade law regime, that is not allowed. The way in which the WTO is functioning, has put elements of international law and economics in tension and if looked at from the political level, has also removed the voting power of the populace. There seems to be a new realisation of the importance of one’s sovereignty and that the power to be able to make decisions should lie with the sovereign state and not with a perceived far-removed organisation. It is argued that the idea of a unified global order and super globalisation cannot co-exist with the existence of sovereign states and as a result other means of co-existence are in the process of being formed and this seems to be in the form of regional and mega-regional agreements, thus creating “micro-constitutions”.

ЗАСТОЙ В ВТО КАК ПРОЯВЛЕНИЕ КРИЗИСА ГЛОБАЛИЗАЦИИ

The present crisis of globalization, which has found one of its manifestations in the crisis of the multilateral trading system, is a growth crisis that arose during the restructuring of the international economic regime. The need for such restructuring is due to the development of transnational production, the deepening of economic interdependence and the weakening of the US as the leader of the world economy. The international economic regime is understood as a system of rules for international economic interaction, including both these rules themselves and the mechanisms that ensure their establishment and implementation. The theory of hegemonic stability, which explained the development of the international economic regime in the past century, in the present century gives way to the theory of interdependence, especially complex interdependence. China will not replace the United States as a guarantor of the stability of the international economic system, not because it is not ready or not capable, but because the new economy needs a new regime that meets the needs of the global market. The US is withdrawing from the role of the guarantor of stability not only because they feel weak relative to their competitors but also because no country is able to play this role in the conditions of growing globalization. As interdependence deepens the stability of the international economic regime will increasingly rely on a system of global governance. The main elements of this system that emerged at the previous stage will undergo changes which are already partly occurring in the IMF, the World Bank and the global financial architecture as a whole. The WTO also needs to be reformed. The most obvious steps of WTO transformation include abandoning the consensus and single undertaking principles in decision-making, enhancing the role of plurilateral agreements, revising the special and differential treatment provisions, expanding the scope of issues beyond traditional trade, harmonizing between the WTO legal system and new norms introduced by mega-regional agreements. The growing complexity of interdependence increases the need for coordination not only between countries, but also between major interest groups, as well as elements of the system of global governance. It seems appropriate to ensure a coherent and coordinated process of transformation of the WTO, the IMF and other parts of the system of global governance. There is a demand for transparent mechanisms that allow to represent interests of transnational businesses, wage earners, consumers and representatives of other participants of the social contract that is to be transformed with the growth of globalization.

New Approaches to the Balance between Investor Protection and the Right to Regulate within Mega-regional Agreements

INTRODUCTION. In 2015 UNCTAD elaborated a roadmap for international investment agreements reform, aimed at bringing the terms of such agreements in line with modern sustainable development imperatives. For a long time the question of the balance between investor protection in the territory of the host state and the right of this state to regulate within international investment and trade agreements has caused controversy among international law scholars. In particular, very often international agreements endow foreign investors with greater rights thereby limiting sovereign rights of the host state. The present article provides a comparative analysis of the investment protection and promotion provisions under the Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11). Also, for the first time among Russian scholars, the authors give an analysis of the changes that occurred during the signature of the CPTPP Agreement on March 8, 2018 after the US withdrawal at the beginning of 2017. MATERIALS AND METHODS. The research in the article is based on the provisions of the CPTPP and CETA that regulate foreign investments as well as the works of Russian and foreign international investment law scholars. It is necessary to mention the significant role of the World Investment Reports, published by UNCTAD in 2016 and 2017, in making a comparison of provisions dedicated to investment protection and the right to regulate, contained in different international investment agreements and bilateral investment treaties. RESEARCH RESULTS. In-depth analysis of CPTPP and CETA provisions that regulate foreign investments showed that these agreements contain unique and innovative provisions that could rarely be found in contemporary international investment agreements. These provisions not only clarify the foreign investor rights when carrying out activities on the territory of the host state, giving more detailed description of the states obligations and the guarantees provided, but also specify rules for the investorstate disputes settlement. DISCUSSION AND CONCLUSIONS. Both megaregional agreements, analyzed in the present article, contain extensive chapters devoted to achievement of maximum transparency in dispute settlement, while CETA introduces its own Investment Court System which includes a permanent appellate body. At the same time, the CPTPP Agreement for the first time, compared with already existent investment agreements, carves out a specific product – tobacco – from protection when settling investor-state disputes. Although neither CETA, nor CPTPP have yet been ratified by the parties, it is important to consider how these provisions on investment regulation would shape future international investment agreements and bilateral investment treaties.

How Best to Ensure Respect for the Right to Regulate in the Face of Foreign Investment Commitments: A Reformed ISA Process or a Return to the WTO

Since the genesis of modern international investment law dating back to 1959 with the first bilateral investment treaty (BIT) signed between Pakistan and Germany and the emergence of international trade law in the form of the World Trade Organization (WTO) in 1994, which can be traced back to the GATT 1947, the two fields of law have developed separately. The WTO framework brings together 164 members committed to a single undertaking comprised of a large number of covered agreements, understandings and plurilateral agreements aimed at liberalizing trade in goods and an increasing range of services. International investment law, on the other hand, consists of a web of more than 3,200 separate investment agreements, whether BITs or investment chapters in regional trade agreements (RTAs) including recent mega-regional agreements. Only a small part of international investment law is to be found in the multilateral framework. This paper seeks to explore the aspects of international trade and investment law which make them different, as well as those aspects which may bring them together. The overriding question posed in this paper is whether the capacity of states to regulate their economies as well as protect the health and the environment of their citizens has been curtailed by either trade or investment law as is feared by many persons around the world. Would these fears be allayed if the two bodies of law were brought united? Or is it preferable to maintain two separate fields of international law, one controlled by states and the other open to the initiative of private interests?

Metamorphosis of Regionalization: from Regional Trade Agreements to Megaregional Projects

The article reviews history and contemporary state of such an economic and trade policy phenomenon as regionalism. Three consecutive stages of regionalization are identified. First stage – prehistory of regionalism – lasted from the middle of the XIX century till 1940-s and was characterized by the formation of bilateral customs unions in Europe with strong political motivation. Second stage – classic regionalism – covers the second part of the XX century and is mostly determined by integration processes in the European region, creation of the EEC and then the EU, organization of a big number of alliances among developing countries mainly in the form of customs union following the EU example and some trade blocs between developed economies beyond the EU (i.a. NAFTA). In this period special disciplines for RTA’s were elaborated under the framework of GATT/WTO. Third stage – globalizing networking regionalism – gained momentum at the start of 2000-s and continues, with certain reservations, till nowadays. Contemporary regionalism has qualitative distinctions from regionalism of the past century. Besides fast and universal, covering all regions and subregions of the world, growth of RTA’s number, their agenda is widening and deepening significantly going far beyond WTO. We could also witness increasing frequency of interregional and transcontinental RTA’s, as well as RTA’s with participation of trade blocks, including interbloc RTA’s. Peculiarity of the current decade is the appearance of a considerable number of RTA’s parties to which represent large and largest world economies, and that was not the case before. But the principal shift is related to the formation of megaregional trade agreements with ambitious, prointegration agenda. New generation RTA’s, containing wide regulatory garmonization agenda and suggesting increasing institutional homogenity of participating economies, de facto promote alternative vis-à-vis classic approach model for the creation of common economic space, though without supranational elements. Nowaday regionalism is definitely drifting towards megaregionalism – the higher stage of regionalization process. Politics of the new American administration and Brexit, which stimulated deglobalization and isolationist tendencies in part of Western world, in practice have only led to some regrouping and deceleration of certain megaregional projects followed by enhancing China’s position on the track of megaregionalism (RCEP, Belt and Road, megaproject with accompanying RTA’s, latest BRICS+ and BRICS++ initiative). Megaregionalism, under any scenario, will exert deep influence on the world trading system and the WTO. In certain conditions megaregional agreements could serve as the foundation for the emergence of new and by large universal system of global management in the sphere of international trade and economic cooperation either as a WTO plus arrangement or in some other form. But this needs long-lasting preparatory interaction for the convergence and finding common denominators between quite different megaprojects as regards their scope and depth.

Mega-regional trade Agreements: Costly distractions for developing countries?

This paper examines the relationship between mega-regional trade Agreements and diet-related health given that such Agreements aim to liberalize “substantially all trade and investment” that could potentially impact on health through tariff elimination and stronger intellectual property commitments in partner countries. We analyse two interlinked policy concerns: first, how tariff reduction/elimination under mega-regional Agreements impact on the production of sugar? Second, how mega-regional Agreements with Trade-Related Aspects of Intellectual Property Rights (TRIPS)-style and TRIPS-plus commitments modify intellectual property rules among partner countries and impact on developing countries’ access to life-saving drugs and medicines? Using a dynamic Global Trade Analysis Project model, we find there are significant health consequences of trade commitments undertaken by developing countries with potential detrimental health effect on populations such that first, higher production of sugar alters consumption trends. Second, despite stricter intellectual property rules, which result in net global gains, developing countries suffer from the regulatory chill effect.

Is the Death of the TPP Good News for Brazil? Mega-Regional Agreements and the Quest for Development ‘Policy Space’

Beyond the controversy between supporters and critics of the Trans-pacific Partnership (TPP), the agreement has generated broad scholarly interest as the first twenty-first century ‘mega-regional’ accord ever concluded. This article seeks to contribute to the debate, analysing the potential regulatory impact of a TPP-like agreement on Brazil and developing countries in general, arguing that third-generation broad economic partnerships may be incompatible with the foreign policy stance of keeping ‘policy space’ for development. The article compares the TPP legal text with previous free trade agreements (FTAs), and analyses provisions in various TPP chapters that contrast with Brazil’s traditional stance in key issues relating to market access, services, investments, intellectual property, electronic commerce and regulatory convergence. Evidence from this exercise outlined that Brazil has not acceded to various international agreements which participation is required under the TPP, and Brazil still lacks modern domestic regulations in crucial areas that would be demanded in a third generation agreement. The recent withdrawal of the United States from the TPP and the uncertainties surrounding trade global governance suggests that Brazil has a window of opportunity to revamp its domestic institutions and decision-making process to become a ‘rule maker’ instead of ‘rule-taker’ in international trade.

IS THE �ASEAN ECONOMIC COMMUNITY� UNDERSIEGE? The New Trajectory of the Asean Economic Community the two Mega- Regional Agreements; �RCEP� and �TPP�

The ASEAN Economic Community (AEC) was signed by the leading nations of Southeast Asia in Kuala Lumpur on 31, December 2015. This was a great achievement of regional integration, pointing members of the AEC towards a single market awakening. Despite this tremendous progress, the reality is that ASEAN members are now involved in two mega-regional agreements. One, which has the potential to protect ASEAN centrality, ASEAN+6 or the Regional Comprehensive Economic Partnership (RCEP); and the other, the US-ledTrans-Pacific-Partnership Agreement. This participation by ASEAN members with various economic partners outside ASEAN may result in dependency to global capitalism networks.Departing from the above mentioned context, the core question then arises: Has the global economic structure provide an opportune precondition for the implementation of the ASEAN Economic Community (AEC)? To tackle this question, this essay will use Dependency Theory to analyze the global economicstructures which encase the AECs regional economic integration agenda and to reveal the ASEAN members dependence on global capitalism. This essay explores both the attempts of the ASEAN framework to create a comprehensive economic community; and the consequences of ASEAN integration with two mega-regional agreements in the region. It is argued that the dependency of ASEAN members on the structure of the global economy proves that it does not provide a proper pre-conditioning for the AEC to be implemented. Moreover, it will be hegemonic factors that challenge the existence of the AEC.

Consolidating International Investment Law: The Mega-Regionals as a Pathway towards Multilateral Rules

AbstractPessimism abounds in international economic law. The World Trade Organization (WTO) faces an uncertain future following its Ministerial Conference in Nairobi in 2015. International investment law is under attack in countries around the world, while mega-regional agreements such as the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership are beset by world events, from the United States’ federal election to the unexpected Brexit outcome. Yet the appetite of numerous States to continue forging plurilateral trade and investment deals provides some cause for hope. Viewed alongside other institutional developments including consensus-building work at the United Nations Conference on Trade and Development and the United Nations Commission on International Trade Law, the potential arguably now exists for credible movement towards multilateral rules in investment law. While the WTO's current negotiating stalemate highlights the difficulties in reaching agreement among 164 Members, international trade law offers lessons for working towards multilateralism in the international investment law field. Alongside informal discussions about a world investment court, mega-regionals provide a vehicle for future multilateral investment rules, particularly through the Comprehensive Economic and Trade Agreement between Canada and the European Union, and the Regional Comprehensive Economic Partnership currently under negotiation in Asia.

Trade and Investment Agreements: Implications for Health Protection

Trade and Investment Agreements (TIAs) have been widely criticized for their potentially negative effects on health. Many governments, particularly from low- and middle-income countries, have voiced concerns that mega-regional agreements such as the Trans-Pacific Partnership agreement, and the Transatlantic Trade and Investment Partnership, will erode governments’ scope for health protection, weakening for instance those options that remain permissible under World Trade Organization rules. Further, these mega-regional agreements will set default standards and rules of the game that even non-signatories will need to emulate in order to be competitive in the global market. This article begins by reviewing the changing structure of trade and investment policy, global production, and the relation between the two. The effects of TIAs on health are then analysed, based on some of the most relevant evidence. Key power asymmetries within the global trade and investment architecture are described, and the way they influence how trade rules are made, implemented and adjudicated. Section 5 examines a particularly striking and topical instance of such power asymmetries, investor-state dispute settlement provisions in TIAs, and their relevance to health. The article concludes with recommendations to mitigate the potential negative health externalities of TIAs.

THE EFFECTS OF MEGA-REGIONAL TRADE AGREEMENTS ON THE MULTILATERAL TRADING SYSTEM // EFEKTI MEGA-REGIONALNIH SPORAZUMA NA MULTILATERALNI TRGOVINSKI SUSTAV

The aim of this study is to investigate the motives and effects of mega-regional trade agreements on the multilateral trading system using the example of Trans Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP). Multilateralism and regionalism, although opposite trends, coexist simultaneously. While many arguments can be given for both approaches one has to recognize that the number of regional trade agreements is increasing and that regionalism is becoming a prevailing trend. The response to the regional trade agreements, especially mega-regionals, will mostly depend upon the effect on the third countries’ trade interests. Since it is expected that, over time, many of the currently excluded emerging economies will become a part of some mega-regional agreement, it is not likely that new global standards and rules will be created on a strictly regional but rather on multilateral level.

Latin America and the risks to the international trading system: megaregional commercial agreements

The article focuses on the peculiarities of the Latin American and Caribbean participation in the international trading system. The author analyzes bound and applied tariff levels in Latin America established when joining the World Trade Organization (WTO) and lists the reasons why the international trading system and the WTO in particular are crucial to Latin American countries. In this light the article investigates the phenomenon of megaregional agreements and reviews the risks they pose to Latin America and to the international trading system in general.