6 research outputs found
Services trade integration in East Asia and political economy impediments in domestic decision-making: a case study of Japan-ASEAN bilateral free trade agreements
In East Asia, services trade integration, both in market and policy, lags far behind goods trade integration. In spite of a proliferation of ASEAN plus one type FTAs in the Region since the early 2000s, policy-led services integration has not happened in East Asia. The aim of this research project is to investigate the reasons why the Japan-ASEAN bilateral FTAs, which were concluded in the 2000s, resulted in the shallow GATS-plus FTAs. Since barriers in services trade lie in domestic regulations, we examine how domestic determinants, namely interests and institutions in domestic decision-making, shaped the negotiating positions of Japan and ASEAN.
From our empirical work, we found the following: (i) The services trade policy-making structure, which involves a wide participation of domestic regulatory authorities in the decision-making process, constituted horizontal fragmentation of power. Because of horizontal fragmentation of power, the domestic regulatory authorities with strong regulatory autonomy and regulatory concerns were able to exercise a veto power against changes in the status-quo and pushed backward the lead ministry’s negotiating positions. (ii) In terms of interests, no strong proliberalisation interests existed either on the policy demand or supply sides. On the policy demand side, while there existed very limited exporting interests, the import-competing services suppliers were afraid of the erosion of rents and adjustment costs caused by preferential market liberalisation. On the policy supply side, there was few incentives to lock in domestic services reforms by using the Japan-ASEAN bilateral FTAs. In addition, (a) pressure for speedy conclusion of an FTA to win the political competition of creating FTAs in the Region and (b) the strong economic and political motivation of FTAs to enhance regional supply chains in the manufacturing sector undermined the countries’ negotiating positions on services trade.
From the findings above, we conclude that services trade integration in East Asia lags far behind goods trade because of the double layered political economy impediments. The first layer of impediment, which is the horizontally fragmented domestic decision-making structure, reflects the heterogeneity of services. The second layer of impediment, which is interests, mostly reflects the distinctive characteristics of East Asi
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What has happened to UK-Japan trade one year after signing the CEPA FTA?
The UK-Japan Comprehensive Economic Partnership Agreement (CEPA) came into force in January 2021, as part of the UK’s post-Brexit trading arrangements. CEPA was designed to largely replicate the EU-Japan Economic Partnership Agreement (EPA), to which the UK had been a party. On the face of it, there was little additional economic value to the UK, since CEPA provisions follow EPA provisions so closely, except for a chapter on digital trade. In this blog, we analyse trade between the UK and Japan in the CEPA’s first twelve months. We recognise that a year is insufficient for a full assessment (particularly given the effect of other factors such as the ongoing Covid-19 pandemic, the Russian invasion of Ukraine, and the UK’s relationship with the EU). Nevertheless, we examine some initial insights that emerge from the data
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The UK-Australia FTA – can we call it a good deal?
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The UK’s new trade deals – what should happen before they are signed?
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Joining the CPTPP: economic opportunities and political dilemmas of future expansions for the UK
On 16th July 2023, the UK Government announced that it had signed the Protocol of Accession to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UK will be the first new member of the bloc and the only member outside the Asia Pacific region and the Americas. The agreement will enter into force after all ratification processes are completed.Much of the UK Government’s narrative around the CPTPP has been focussed on the economic benefits. The Secretary of State for Business and Trade, Kemi Badenoch, commented that the UK will only see the full benefit of the deal if we use it. In 2021, the CPTPP countries (excluding the UK) accounted for almost 11% of the world’s GDP (US 7.5 trillion).However, these benefits are likely to be modest but could rise with future CPTPP expansion. Indeed, the UK Government’s documentation points out that “the more CPTPP expands, the greater the benefits to the UK. This is why we want a seat at the table now”. Perhaps more importantly, joining the CPTPP could represent a geopolitical strategic gain for the UK.In this Briefing Paper, we consider the potential economic opportunities for the UK arising from the current CPTPP in comparison with the likelihood of further expansion in the future. We first evaluate the UK’s economic opportunities with both current and potential CPTPP members, including trade in goods, trade in services, supply chain relationships and rules of origin. In the analysis, we compare the CPTPP’s policies, with those of current and potential CPTPP members. Then we assess the political economy of CPTPP expansion. Finally, we conclude with some policy suggestions.</p