WORLD TRADE ORGANIZATION : ISSUES AND CHALLENGES FOR ASEAN ECONOMIES

Abstract

Over the past decade, international economic liberalization has been pursued through both multilateral and regional agreements. At a time when many regional arrangements were being negotiated, the establishment of the World Trade Organization (WTO) in January 1995 gave a strong boost to multilateral trade. Its establishment from the successful conclusion of the seven-year long Uruguay Round injected much optimism to a trade regime based on open access to markets and well-defined rules. The perceived threat of regionalism has hastened ASEAN's efforts at economic integration. The ASEAN Free Trade Area (AFTA) is charged with the responsibility of facilitating economic integration within ASEAN and also to widen and deepen ASEAN's economic integration with the global economy. The establishment of the WTO is a boost to multilateral trade. The implication that competition and rules are the basis for trade and investment are positive signs for AFTA. If the WTO is indeed well designed to manage complicated trading conditions and possess enhanced power for enforcement of decisions, the environment will be good for ASEAN. As small players in international trade, ASEAN sees strong advantages in having internationally agreed rules, with procedures for enforcing them and nonarbitrary methods of changing them. ASEAN would have to consistently play by the rules and actively ensure that the WTO be a success. In this regard, the WTO will welcome ASEAN as an ally in its effort to achieve the goal of a more open and freer trading environment promised by the Uruguay Round and envisaged by the WTO.