Free trade is all the rage in the Asia-Pacific region. Thailand, for example, which just signed a free trade agreement with Australia, starts formal negotiations with the US next week on a similar deal.
Thailand is discussing FTAs with more than seven countries, or groups of countries, including China, ASEAN and the European Union.
Singapore, which has long been a beacon for free trade, already has FTAs with Australia and the US and is discussing similar arrangements with virtually any country willing to do so.
Malaysia, which under its previous prime minister was leery of such deals, is starting to send positive signals. Even China is discussing FTAs including with Australia.
But not all free traders are happy. Many lament the growth of bilateral arrangements, believing they come at the expense of a multilateral agreement negotiated under the World Trade Organisation.
One thing all free traders agree on is multilateral deals are superior to bilateral.
Bilateral deals can, and no doubt do, lead to trade diversion where as a result of a deal, trade is diverted from a non-signatory country to a higher cost signatory county.
There is also valid concern about protectionist measures being inserted into bilateral deals.
Among these are measures that impose onerous environmental requirements that result in higher costs, requirements that go far beyond anything likely to be agreed in a multilateral framework.
The problem is, however, the multilateral trade liberalisation has ground to a halt.
The street battles accompanying inauguration of the world trade talks in Seattle in 1999 demonstrated powerful political forces were against further liberalisation, and this was followed by the virtual collapse of those talks at Cancun last year.
Any country nailing its colours to the mast of multilateral trade talks was sailing thereafter in a becalmed ship.
Anti-trade non-government organisations, protectionist trade unions and the cosseted agricultural industries of Europe, Japan and the US had derailed the process.
One reaction is to persevere solely with multilateral processes. But this may mean taking a step backwards, with trade liberalisation failing to keep up with the growth of new forms of commerce, especially in the services trade.
Placing all eggs in this basket would risk energising the anti-trade protectionist forces that are never far from the surface.
Moreover, as shown by the European Union, expanding trade and markets even if via the imperfect path of bilateral agreements, leads to greater competition, growth, and gives impetus to more wide-ranging and uniform liberalisation.
Hence governments have, rightly, embarked on the more cautious but forward-looking approach of negotiating bilateral free trade treaties.
In this respect, Australian negotiators have been careful to use bilateral deals to build on and not undermine multilateral arrangements. This not only keeps the liberalisation process going, but adds impetus to restarting multilateral negotiations.
And this appears to be happening with the governments pushing bilateral also doing the most to re-energise multilateral negotiation in the WTO.
Over the past 50 years, trade liberalisation has been among the two or three factors that have propelled the world economy into its present unprecedented prosperity.
It would be a tragedy if it was allowed to wane for the lack of purity.
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