potential for large sectoral shifts in employment, which could be disruptive to those economies 56 Some of the proposed SRTA among the smaller APEC members might be seen as exemplars of “best practice”. 57 Since they would be between small economies the trade gains and any trade diversions would be small. If such “best practice” agreements were exported around the region, particularly under “open regionalism” perhaps there is an argument for further pursuit of this approach. The detour from open regionalism and pursuit of free trade in the context of multilateral negotiations could be a costly one, for APEC the institution as well as some of its poorest members.
Such an outcome is not predetermined, so long as the SRTA works within the framework of WTO rules. 56 Robert Scollay and John P. Gilbert (2001), New Regional Trade Arrangements in the Asia-Pacific?, Institute for International Economics: Washington DC. For analysis of both GDP effects and sectoral employment shifts see: Drusilla K. Brown, Alan V. Deardorf, Robert M. Stern (2001), “CGE Modelling and Analysis of Multilateral and Regional Negotiation Options,” manuscript January 23, forthcoming in Robert M. Stern ed. Issues and Options for US -Japan Trade Policies, University of Michigan Press: Ann Arbor. 57 See comment in Scollay and Gilbert, pp 111. - 37-