The third risk of preferential agreements is a theme that deals with the theme “Hub and Spoke”. As part of a global trade cycle, major players negotiate transfers with each other and then extend them to any other WTO member. In bilateral negotiations, large players (Hubs) can choose smaller economies (rays). The system can be detrimental to shelves if their agreements with hubs prevent them from importing cheaper products from other shelves. Trade diversion is costly for the shelves. The World Bank has estimated the cost to developing countries at $20 billion per year. There are three levels to define such a relationship with China: global (with regard to international treaties), regional (with regard to ASEAN itself) and bilateral (within the framework of the various ASEAN Member States). However, the most important is the second, that is, at the regional level between ASEAN and China. Bilateralism is the behaviour of political, economic or cultural relations between two sovereign states. Unlike unilateralism or multilateralism, which is practised by a single state or jointly by several states.
When states recognize each other as sovereign states and accept diplomatic relations, they create bilateral relations. States with bilateral relations will exchange diplomatic agents as ambassadors to facilitate dialogue and cooperation. Order routing includes local brokers to have a bilateral agreement with at least one broker in the other exchange and to open a trading account with them, as they are not registered as members of that exchange, where trading is executed. Such agreements guarantee compliance and help with resolution. As soon as the local broker receives a commercial request from its local customers via call/online, the broker sends the order to its exchange via its local gateway. The order is then transmitted through the IAN hub to the currency gateway and then to the appropriate platform of that exchange. On this date it becomes an order from the foreign broker (who had bilateral agreement with the local broker), since the local broker enters their foreign broker partner`s ID while he sends the trade.