Defending the rule-based trading regime: The multilateral trading system at risk and required responses

The current trade turmoil is not limited to negative economic effects stemming from the series of recent trade measures erected by the United States as par t of the escalating U.S.–China trade war. The more serious issue that will unfold in the middle to long term is the potential collapse of the rule-based trading regime. The weakening of the multilateral trading system centered by the World Trade Organization (WTO) seems to continue. East Asia has been one of the largest beneficiaries of the rule-based trading regime in its course of extending and deepening international production networks and must now take proactive moves to defend and preserve this stable economic environment. Two crucial tasks in the preservation of the WTO are effor ts to maintain the functionality of the dispute settlement mechanism and the revival of the WTO as a forum for future trade negotiations. At the same time, East Asia must develop a network of mega–free trade agreements (FTAs) to par tially supplement a possible loss of the multilateral framework.