Asia's regional free trade agreements (FTAs) will play an increasingly important role in overcoming an impasse at the World Trade Organization (WTO), analysts say.
Speaking at a forum entitled "Future of the World Trading System: An Asian Perspective" hosted by the Thailand Development Research Institute (TDRI), Ganeshan Wignaraja, the Asian Development Bank Institute's director of research, said the rise of regional FTAs stemmed from the "eroding role" of the WTO in trade agreements.
"On the regional level, the way to overcome this will be through the merging of various overlapping FTAs in the region into a single multilateral pact," he said. "It also has the potential to include smaller and low-income economies."
Moreover, the new pact would seek greater compromise between countries and make it likelier to achieve the regional free trade mission.
Mr Wignaraja said the aspects in which many Asian FTAs fell short included agriculture, services, investment, intellectual property and removal of tariffs.
"Many countries have signed FTAs that have little economic impact on them, leading to low use compared with FTAs with the US and Europe that provide clear benefits to the country," he said.
And while the share of intra-regional trade has grown with the expansion of production networks and FTAs, the years since the 2008 financial crisis have seen a rise in protectionist policies.
"SMEs are important to the economy and employment of many countries,
but they are underrepresented in
regional production networks," Mr Wignaraja said.
An Asian Development Bank survey showed factors that small and medium-sized enterprises had to consider before becoming part of a production network were their size, management experience and technology.
"Many also lack information and resources that large companies have in order fully to use FTAs that have become increasingly complicated," Mr Wignaraja said.
TDRI president Somkiat Tangkitvanich said the many rules and regulations in Asian countries remained obstacles to trade.
"Thailand has only liberalised the production sector, while the service sector including energy, telecommunications and logistics is closed off," he said. "But those are the foundation that supports a country's competitiveness."
Mr Somkiat said the country could also improve its economic situation by integrating with and supporting production capacity in Cambodia, Laos and Myanmar.