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RTA as an International Institution: A Multi-Dimensional Comparison of Its Institutional Arrangement

19 Pages Posted: 8 Jul 2008 Last revised: 20 Feb 2015

Tomohiko Kobayashi

Otaru University of Commerce

Date Written: July 8, 2008

Abstract

Regional trade agreements (RTAs) serve as the building blocks that facilitate world trade, especially under the framework of the World Trade Organization (WTO). Concluding RTAs such as free trade agreements (FTAs) and customs unions is therefore not by itself a goal. If the prevailing conditions permit, countries would rather create broader frameworks of regional integration that would ultimately replace or incorporate their existing RTAs. Setting up organizational mechanisms to streamline its regular operations and adjust to subsequent changes in circumstances is thus essential for any RTA to function effectively. However, research on provisions for addressing the changing nature of RTAs is scarce. This paper therefore focuses on the institutional mechanisms of Japan’s RTAs and takes initial steps toward clarifying how they should be designed in the future. Specifically, we shed light on the roles of the three key provisions of RTAs that regulate their effective functioning as part of the world trading system, namely (1) provisions for the orderly functioning of RTA rights and obligations, (2) provisions for forming relationships with other trade-related agreements, and (3) provisions for adjusting to subsequent changes in circumstances. These three points represent the internal, external, and interstitial aspects, respectively, when discussing the effective functioning of an RTA. From this analysis, we find certain characteristic features of Japanese FTAs such as flexibility with regard to the consultation of parties, deference to WTO Agreements, and a reluctance of including provisions on accession. These features will surely face challenges in the institutional designs of future FTAs with larger trading partners such as the US, the EU, China, and Korea.

Keywords: Regional Trade Agreements, RTA, Institutional arrangement, Institutional operation, Institutional structure, Target country, Parallel agreement

JEL Classification: F02, F10, F13, F14, F15

Suggested Citation

Kobayashi, Tomohiko, RTA as an International Institution: A Multi-Dimensional Comparison of Its Institutional Arrangement (July 8, 2008). Society of International Economic Law (SIEL) Inaugural Conference 2008 Paper. Available at SSRN: https://ssrn.com/abstract=1156856 or http://dx.doi.org/10.2139/ssrn.1156856

Tomohiko Kobayashi (Contact Author)

Otaru University of Commerce ( email )

3-5-21 Midori
Otaru, Hokkaido 047-8501
Japan
+81-134-27-5430 (Phone)
+81-134-27-5430 (Fax)

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