The changing outlook for Asia-Pacific regionalism

In the mid-1990s the Asia-Pacific region appeared to have achieved an exceptional degree of congruence between the regional and multilateral approaches to trade liberalisation. APEC and the newly-established WTO purported to have effectively answered, at least as far as the region was concerned, the challenge of regionalism. This challenge had earlier appeared in the form of proliferating proposals for preferential trading agreements (PTAs), and in the emergence as a possible alternative to the multilateral trading system of a world trading system organised around three giant preferential trading blocs, with the prospect that the European Union would be joined in the western hemisphere by NAFTA and perhaps later even by a hemisphere-wide trading bloc,1 and in East Asia by the East Asian Economic Grouping proposed by Malaysia's Dr Mahathir.2 By the turn of the century, however, the effectiveness of the answer provided by the WTO and APEC was open to question. Both institutions faced challenges to their credibility, proposals for new PTAs were proliferating in the Asia-Pacific region, and the prospect of a 'tripolar' world trading system had begun to loom once more. Disturbing signs had emerged that major economic powers in the region might begin to aggresively seek support within the framework of regional arrangements for trade policy stances that had already proved divisive in the multilateral arena.