Competitive liberalization: foreign direct investment and the proliferation of free trade "plus" agreements.

In recent years, free trade agreements concluded between developing and developed countries have proliferated rapidly. By including rules for investment and services, these recent FTAs comprise much more than tariff elimination. Why the sudden proliferation of these agreements, when most-favoured-nation tariffs are at a historically low level? This paper identifies the interests behind these agreements, arguing that they are a reaction to the liberalization taking place in advanced developing countries, conditioned by specific institutional features of the global trade regime. Motivated by an accelerating competition over markets and access to foreign direct investment, countries conclude more and more bilateral agreements out of fear of being left behind. The central finding is greatly increased role of interests around foreign direct investment, a factor that has been overlooked in previous analyses. The study is based on comparative case studies of FTAs concluded by Japan, the US, and the EU. [ABSTRACT FROM AUTHOR]