A new report from the World Economic Forum looks at the opportunities and risks of mega-regional trade deals.

1. What are mega-regional trade
agreements?

2. • Mega-regionals are deep integration partnerships between countries
or regions with a major share of world trade and foreign direct
investment (FDI)
• Beyond simply increasing trade links the deals aim to improve
regulatory compatibility and provide a rules-based framework for
ironing out differences in investment and business climates
• The two most significant mega-regional trade agreements currently
under discussion are the Trans-Pacific Partnership (TPP) and the
Trans-Atlantic Trade and Investment Partnership (TTIP)
• Both agreements would affect at least a quarter of world trade in
goods and services (TPP: 26.3%; TTIP: 43.6%) and of global FDI
In Brief

3. Who’s involved

4. Trans-Pacific Partnership (TPP)
• Originally a four-way free trade agreement between Brunei, Chile,
New Zealand and Singapore, the TPP now encompasses eight
additional countries: the US, Australia, Canada, Japan, Malaysia,
Mexico, Peru and Vietnam. South Korea might also join the group

5. Trans-Atlantic Trade and
Investment Partnership (TTIP)
• The TTIP negotiations, launched in June 2013, aim for a
far-reaching trade agreement between the US and the
EU. It includes plans to remove trade barriers as well as
improve alignment, compatibility and possible
harmonization of regulations and standards
• Research suggests it could boost the EU’s economy by
€120 billion and the US economy by €90 billion annually

6. The optimisits’ case…
“[Mega-regionals] provide a means for facilitating existing
patterns of commerce and building new ones. They enable
businesses and governments to respond proactively to
competitive challenges and create higher common
denominator trade agreements. And if designed with open
architecture, they hold open the option of building out
eventually to a healthier multilateral outcome.”
- Susan Schwab and Karan Bhatia

7. …but risks remain
“If regional trade agreements and their power asymmetries take
over, there is a risk that the World Trade Organisation would go
down in future history books as a 70-year experiment where world
trade was rules-based instead of power-based. It would, at least for
a few more years, be a world where the world’s rich nations write
the new rules-of-the-road in settings marked by vast power
asymmetries. This trend should worry all world leaders.”
- Richard Baldwin

8. Mega-regional Trade Agreements - Game-
Changers or Costly Distractions for the
World Trading System?
Read the full report here:
http://www3.weforum.org/docs/GAC/2014/WEF_GAC_TradeFDI_MegaRe
gionalTradeAgreements_Report_2014.pdf