Economic Development in Developing Countries and the Future of Trade Agreements

Abstract

Developing countries have enjoyed the benefits of a free trade regime under the WTO in the 21st century. President Trump, who pledged to exercise an “America First” policy, has made policies which devolve such a liberalization of trade and investment. In this paper, we try to predict the future course of trade and investment liberalization under the “America First” policy. For that purpose, first, we examine the reasons that WTO negotiations for trade liberalization have begun to flounder. Then, we investigate the future course of FTA/EPAs, especially, the TPP and RCEP which are considered to influence the success of multilateral trade negotiation. For the TPP, we discuss whether the number of countries which participate in the TPP will increase, without the USA, and whether the USA will participate in the TPP again. For the RCEP, in which 16 countries have held meetings for promoting negotiations, we compare the existing bilateral EPAs between two among those 16 countries to reveal the factors which prevent a negotiation consensus. Further, we also examine whether the plans for WTO reform proposed by the EU and Japan can induce the USA and China, who are the most influential countries, to comply with WTO regulations. Finally, we make a prediction about the future course of trade agreement, standing in the position of developing countries.