WTO collapse set to fuel Asia’s “noodle bowl” effect

TOKYO, July 25, 2006 (AFP) – The breakdown of the WTO talks is likely to encourage the further proliferation of bilateral free trade pacts in Asia that have raised concerns about a “noodle bowl” of overlapping rules, analysts said. East Asian nations have already been rushing to negotiate individual agreements to remove barriers to trade, apparently on the expectation that the 149-nation World Trade Organization talks would flounder, they said.

WTO chief Pascal Lamy’s decision to recommend an indefinite suspension in the long-faltering Doha round negotiations is therefore expected to lead to the further rise of bilateralism in Asia and around the globe.

“The prospect of an intensification of bilateral free trade deals is very real if the Doha round finally does break down,” said Professor Peter Drysdale at the Australian National University in Canberra.

East Asian nations’ trade with North America and Europe, particularly in finished goods, has been growing even faster than intra-regional commerce, which is largely in intermediate goods and components, he said.

“So a retreat to negotiation of more narrow bilateral arrangements is not good news for the East Asian economies and the hope is that if the round does stall,