Skip to main content
Article thumbnail
Location of Repository

Bilateral trade agreements in the Asia Pacific: wise or foolish policies?

By Heribert Dieter


Bilateralism is mushrooming in the Asia - Pacific, yet the motives for it remain puzzling.\ud \ud Why do countries devote substantial effort to bilateral free trade agreements that are providing limited additional benefits when compared both with unilateral liberalisation and with the multilateral regime? Furthermore, some of the deals recently implemented are less trade liberalising than the powerful rhetoric would suggest. For example , the free trade agreement between Australia and the United States is not including “substantially all the trade” and, on top of that, is asymmetric – Australia’s access to the American market is more restricted than vice versa.\ud \ud The paper first addresses some conceptual issues and analyses the disadvantages of bilateral free trade agreements. Here, the need for rules of origin is of particular concern. These have two effects. First, they result in additional costs to producers. Whilst the dismantling of tariffs reduces the cost of trade, the need to administer rules of origin increases them. Second, transnational production is made more complicated. In order to qualify for duty free trade, the region for the sourcing of inputs shrinks, with negative consequences for competitiveness. Subsequently, the bilateral agreements of Australia, Singapore and Thailand will be examined. At closer inspection, these preferential deals are not convincing. All of them require complex rules of origin and do not make a significant contribution to the liberalisation of trade

Topics: HF
Publisher: University of Warwick. Centre for the Study of Globalisation and Regionalisation
Year: 2005
OAI identifier:

Suggested articles


  1. (2003). Advancing the National Interest, Canberra. Australian Government
  2. (2004). All the Way with the USA. Australia, the US and Free Trade,
  3. (2005). America’s Credibility goes ‚Timber!’, in: Center for Trade Policy Studies,
  4. (2005). ASEAN-China Free Trade Area: A Bane or Boon for ASEAN Countries? in: doi
  5. (2005). Die Verhandlungen über bilaterale Wirtschaftsabkommen zwischen Japan und den ASEAN-Ländern, 2000-2005, in:
  6. (2005). Die Zukunft der Globalisierung. Zwischen Krise und Neugestaltung,
  7. (2003). Exploring alternative theories of economic regionalism: From trade to finance in Asian co-operation?, in: doi
  8. (2003). Fiebinger, Gernot doi
  9. Heribert Dieter Bilat eral Trade Afreements in the Asia-Pacific: Wise or Foolish Policies? Centre for the Study of Globalisation and Regionalisation
  10. (2005). Innwon (2005): Free Trade Areas in East Asia: Discriminatory or Non-discriminatory? in: doi
  11. (2003). Le Huu (2003): Singapore and ASEAN in the Global Economy. The Case of Free Trade Agreements, in: doi
  12. (2004). Locked in. Australia Gets a Bad Intellectual Property Deal, in:
  13. (2004). Muh-Heng (2005): Bilateral ‘WTO-Plus’ Free Trade Agreements: The WTO Trade Policy Review of Singapore doi
  14. (2004). Präferenzielle Ursprungsregeln in Freihandelszonen: Hemmnisse für den internationalen Handel?
  15. (2005). Prospects for Regional Free Trade in Asia, in: doi
  16. (2005). Rahul (2005): Whither Trade Policies in Southeast Asia? The Wider Asian and Global Context, in: doi
  17. (2003). Singapore’s Bilateral Free Trade Agreement: Institutional and Architectural Issues,
  18. (2005). Singapore’s Trade Policies. Priorities and Options, in: doi
  19. (2005). The Association of South East Asian Nations – People’s Republic of China Free Trade Area: Negotiating Beyond Eternity With Little Trade Liberalization?, in:
  20. (2004). Thurnbon, Elisabeth; Math ews,
  21. (2005). Vonkhorporn, Pimchanok (2005): Trade Policy in Thailand. Pursuing a 37 Dual Track Approach, in: doi
  22. World Trade Organization (2004): The Future of the WTO. Addressing Institutional Challenges in the New Millennium.
  23. (2004). Yongzheng (2004): The United States and the New Regionalism/Bilateralism, in: doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.