cific cross-border arrangements in the case of China, Japan and Korea have been quite innovative, centering on linking producers with agribusinesses in the form of cooperatives, the domestic private sector and TNCs. They have been re­sponsible for initiatives in niche areas and include contract-growing of perishables for competing NGOs, agroprocessors and supermarkets (Bayes, 2005). These arrangements have had a favorable impact on production by providing or en­hancing access to assured markets and reliable information, reducing transaction costs, providing means to handle mar­ket risks and increasing producer profits. They may provide models to explore for other countries in the region (Bayes, 2005).
     The emergence of such marketing arrangements has not been an unmitigated blessing for small farmers and distrib­utors, however (Humphrey, 2006). Many studies have al­ready been devoted to devising guidelines for policy makers in this context and Governments may wish to consider them (Reardon et al., 2006; Altenburg, 2006). Another problem arising from these developments in trade includes wildlife endangerment. For instance, the rapid transformation of the Chinese economy and the allied increase in consumer purchasing power implies growing pressure on individual species over the coming years (von Moltke, 2000). Increas­ingly, ESAP states will need to address domestic as well as international concerns on this front.

5.8.2     Poverty and the liberalization of international trade
The impact of liberalization on the levels and prevalence of poverty is a highly contentious issue in the region. The pro­cess of liberalization may involve higher risks for national producers and labor than for consumers. The analysis of poverty is especially difficult due to the simplifications of the theory, the fact that the category "poor" is both diverse and dynamic (i.e., changing over time, even seasonally) and the challenges of measurement.
     The theory points to positive net results and many as­sessments confirm this although they acknowledge that for some groups such as small farmers and farmers in less fa­vored areas incomes may deteriorate (CGPRT, 1999). There is, however, no shortage of studies which are unequivocally pessimistic about the overall outcomes of these reforms (Ro-drik, 2001; SAPRIN, 2002; Patnaik, 2004).

"While theory may suggest that the liberalization of trade policies will result in net benefits to the liberalizing country and while there may be a growing collection of empirical studies to support the theory, it is also clear from the preced­ing discussion that the benefits of liberalization will not nec­essarily be achieved and even where they are, some groups of individuals within some countries are likely to be disad-vantaged. In a concise and convincing paper, Winters . . . argues that although he believes that trade liberalization aids economic growth, it "may have some adverse consequences for some—including some poor people—that should be avoided or ameliorated to the greatest extent possible". He suggests that rather than using this as a reason for resisting reform, it should "stimulate the search for complementary policies to minimize adverse consequences and reduce the hurt that they cause". It is clear that there is no clear con-

sensus that liberalization results in economic growth, de­spite a number of major research programmes investigating this relationship. It is therefore important to understand the types of reform that have had the greatest impact on eco­nomic growth in each country." (FAO, 2003)

In essence, the impact of trade reform on employment and hence on poverty is context specific. There are guidelines to the questions that need to be answered in order to accu­rately anticipate its net impact (Bussolo et al., 1999; Kanai, 2000).

5.8.3     Bilateral and regional agreements and their implications
Pascal Lamy, Director General of the WTO, is reported to have anticipated 400 preferential trade agreements by 2010. The reasons for the continuation of this trend have been well documented and analysed and are numerous (Sagar, 1997; Gilbert et al., 2001; Hilaire and Yang, 2003; Bhag-wati et al., 2005; Menon, 2006). The Asia-Pacific region, including the smaller island states, has been particularly active in the drive to so-called "new regionalism" (Figure 5-2) (Ethier, 1998; Majluf, 2004). Bilateral and preferen­tial agreements involving at least one Asia-Pacific state rose from 57 in 2002 to 176 in October 2006, about 70% of which have yet to be implemented. Furthermore, the region can be expected to be even more active in this regard as a result of post WTO-entry initiatives by China and Vietnam. The agreements have distinctive product coverage, time lines and varying rules, etc., so future harmonization of these agreements would be very difficult. Given the current activi­ties of larger economies in the region including China, Ja­pan and India, there is clearly the risk that a hub-and-spoke system will dominate, with these leading economies as the hubs. While ASEAN may also include hub contenders, this is muddied by individual ASEAN members also pursuing bilateral trade agreements (BTAs), especially with the USA and Japan. The resulting "spaghetti bowl" of agreements and rules can enormously complicate the life of interna­tional traders, so that an exporter can enter another market under different sets of preferences, multiple agreements may exist, preferences may be prohibited from being realized and MFN entry may appear to be the least costly action.
     The negotiation of bilateral agreements is often politically easier than multilateral or regional approaches; however, some are sanguine about the prospects of such agreements eventually being aggregated to a wider grouping. Several op­tions exist, including those of linking individual "spokes" under a single PTA to create de facto regionalism and reduce trade diversion and "open regionalism" (as per the APEC 1994 Bogor Declaration) in which BTA preferences are ex­tended to non-members (Strutt and Lim, 2003).
     The challenge for ESAP governments is to configure and phase the transition along the spectrum of bilateral/sub-re­gional to multilateral integration in ways that enable the development of a global, non-discriminatory trading system from which the agricultural sector can benefit. A compre­hensive set of guidelines has been suggested by the Asian Development Bank whereby the  adoption and effective implementation of ten basic principles would minimize the potential damage from bilateral agreements while allowing