Trade has entered a new era in its economic

Trade has bringthe world closer and improved human lives. Especially with the globalizationtrade has become more frequent.

Globalization includes interaction andintegration of people, companies, and different countries, it is motivated byinternational trade and international investment and supported by informationtechnology. This process brought changes and effect on environment, culture,political systems, and economic development around the world. There are manydifferent trade agreements no matter they are international agreement orregional agreement setup in recent years, however not all of them are perfectand we will analysis the shortcoming of them and see if better traderegulations can further improve the world and international development.  International and regional trade regimes Policy and technology developments in thepast few decades have increased rapidly in several sectors, such as cross-bordertrade, migration and investmentare in high numbers and made manypeople believe thatworldwide has entered a new era in its economic development. The volume ofworld trade has increased by 20 times since 1950s and according to WTOtradestatistics, international tradeflows have increased dramatically over the last three decades. The value ofworld merchandise exports rose from US$ 2.03 trillion in 1980 to US$ 18.

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26trillion in 2011, which is equivalent to 7.3 per cent growth per year onaverage in current dollar terms. Commercial services trade recorded even fastergrowth over the same period, advancing from US$ 367 billion in 1980 to US$ 4.17trillion in 2011, or 8.

2 per cent per year. When considered in volume terms,world merchandise trade recorded a more than four-fold increase between 1980and 2011.(Wto.org, 2017) The globalization now is pushed by policieswhich have opened economies domestically and internationally. In these years afterthe World War 2, especially during the last20 years, many countriesadopted freemarket economic system, this increased their productive potential and creatednew opportunities for international trade and investment. Governments of thesecountries also have reducedbarriers to commerce and have signed internationalagreements to promote trade in goods, services, and investment with worldwide.

 With the new opportunities in foreignmarkets, many corporations built foreign factories and created marketingarrangements with foreign partners. A defining factor of globalization is the internationalindustrial and financial business structure. However, globalization is controversial sometimes. Supporters ofglobalization believe that globalization allows poor countries to develop economyand improve their citizen’s living standard. And opponents of globalization arguethat the creation of unfettered international free market only benefitedmultinational corporations in the developed countries at the expense of localenterprises, local cultures.

So there are resistance to globalization at bothpopular and governmental level as people and governments try to manage the flowof capital, labor, goods, and ideas that formed the current globalization.Inorder to find the balance between benefits and costs relatedto globalization, peopleof all nations need to understand how globalization works, the policies and thechoices facing them or their societies.  3 the rise of Regional trade agreements and itsshortcomingOne of thebiggest development in the global trade system since 1990s is the huge raise inRegional Trade Agreements.

From about fifty Regional Trade Agreements in 1990that notified to the World Trade Organization, the number has raised to 279 in2017. Regional trade agreements increased both innumber and reach over the years, includied significant increase in plurilateralagreements under negotiation. After the RTA signed between Mongolia and Japanin June 2016, all World Trade Organization members have a RTA in force now. Trade becamemore regionalized especially among the developing world but this trend is most seenin Asia area. Comparing to Asia area, industrialized region’s intra-regionaltrade shares in Europe have bog down and declined in North America area inrecent years. These developments could be related to the rise of China in the worldtrade market, since its growing share in world trade would also boost regionaltrade in Asia and with other regions.

Nowadays trade is mainly motivated by afew big trading corporate across countries, and the dominant performance ofglobal companies. At first WTO supported the growth of Regional Trade Agreementsbecause WTO believed that regional integration could complement multilateraltrade regime. But the sudden rise in RTA numbers in global trade and increaseddiversion of trade through RTA became a concern for the multilateral tradesystem under WTO.  Regional tradeagreement is an important exception to the World Trade Organization’s principleof non-discrimination. According to WTO rules, countries signed RTA can tradeamong themselves and enjoy preferential tariffs, easier market access conditionsthan other WTO member countries. So as a result those WTO members who are not apart of the specific RTA will lose out in these markets.

Furthermore, tradingwithin the regional trade agreement doesn’t come under the scope of WTO. Whilethere are increasing amount of global trades are diverted through this route,there are more and more concerns about the role of Regional Trade Agreements inWTO.  The WTO AnnualReport 2003 showed concern about this latest development and comments:RTAs can complement the multilateral trading system, help tobuild and strengthen it. But by their very nature RTAs are discriminatory; theyare a departure from the MFN principle, a cornerstone of the multilateraltrading system. Their effects on global trade liberalization and economicgrowth are not clear given that the regional economic impact of RTAs is ex anteinherently ambiguous”.

(Networkideas.org, 2017) Non-discrimination betweentrading partners is one of the main principles in the World Trade Organization.But RTA built one of the exemptions and being authorized by WTO subjected to aset of rules. Under these rules, it recognizes the need to improve transparencyand understand the impact of RTA on the interests of WTO members. On 2006 WTO members implemented a provisionalmechanism to enhance the transparency of such agreements and better understandtheir effects on multilateral trade system.

Under the process, members notifiedthe WTO about their existing RTAs and are discussed by the wider WTO membership.    4. Can bettertrade regulation promote international development Under the modernrapid changing international trade environment, policy makers should reconsiderthe current models of trade cooperation. This relates to both the form and itscontent. The reality of current practices has overtaken the way tradenegotiation agendas traditionally been set. In today’s world, it is gettingharder and harder to separate goods from services. Barriers to merchandisetrade, no matter tariffs or non-tariff ways, disturb the delivery of a”package” from manufacturing side and vice versa. Barriers to investment, anddifference or weakness of regulatory regimes also affect making decision onselecting production facilities location.

So far governments addressed these problemsthrough the discussion of preferential trade agreements. This is the start of developmentsconcerning multilateral disciplines which will prevent duplication anddivergence and ensure fairness, balance and to create a level playing fieldamong countries. But the current WTO agenda-setting and negotiations haveproven that it is too slow for business and those countries which heavilyinvolved in complex trade. And other models of trade cooperation such assectoral agreements may gain support temporally, but they have uncertainoutcomes. WTO trade negotiations are becoming heavy burden for many countries.What should be done to improve the current situation? Firstly, governments needto move forward on the current agenda and address market access conditions forboth goods and services and ensure they are under equal determination.Secondly, other sources of unfair competition and restrictions in the open flowof trade need to be addressed at the worldwide stage rather than just regionallevel. Analyze the information provided by the WTO’s preferential tradeagreements transparency mechanism and also strengthen the WTO’s other monitoringfunctions can help to identify problems that are already addressed in one wayor another at the WTO, in example, various types of NTMs.

Furthermore, newissues can be emerged, such as investment and competition policy whichmultilateral action may be beneficial. International development is inevitableunder the trend of globalization. So I believe strive to address the issueswithin global trade and setup better trade regulation is necessary and eventuallyall population will benefit from it.