envisaged is a very large version of NAFTA. In South-East Asia, ASEAN has embarked on the formation of an FTA by 2003.
Such economic co-operation relies on the negotiation ratification of binding international agreements because, according to the conventional wisdom of the past generation, policy reforms to reduce obstacles to international trade were seen as "costs" or "concessions". Accordingly, the ere undertaken only if other governments guaranteed that they would make comparable "concessions". Once reforms to deregulate or free up markets, which actually create the greatest benefit to the economies making these changes, are mistakenly perceived to be "concessions", then there is an inevitable urge to deny the benefits of any such reforms to non-participants. Hence, there has be a tendency to create discriminatory regional economic arrangements
Such discriminatory, or preferential, arrangements contravene the basic principle of non-discrimination (or most-favoured nation (MFN) treatment) contained in Article 1 of the GAT TWTO. An exemption from that required is permitted, under Article 24, if participants in a preferential trading arrangement make a binding commitment to eliminate, completely. all restrictions to trade in substantially all of their internal trade according to a fixed schedule. The recent proliferation of such discriminatory FTAs, including those within the Asia Pacific region, is sometimes seen as a "stepping stone" towards a giant FTA including all Asia Pacific economies, en route to global free trade. But it is neither a realistic, nor a desirable scenario.