non-members by developing countries could be a primary factor causing the trade diversion.
The analysis of seven specific FTAs yielded similar observations to those obtained from the
analysis of RTAs by taking account of differences in the levels of economic development.
Based on these results, we can derive the characteristics of desirable RTAs that maximise
the trade creation effect and minimise the trade diversion effect. The desirable RTA is the
customs union with a large number of members and low external tariffs. Observing a sharp
increase in bilateral FTAs in recent decades, the countries are advised to transform FTAs to
CUs and to expand their membership by merger or coordination with other FTAs.