Is Trade in Asia Really Integrating?

Is intraregional trade in Asia really integrating? It is not easy to answer this ostensibly simple question. There are two ways to assess the level of trade integration: de facto integration and de jure integration. With respect to de facto integration (actual level of interdependence in terms of trade flows), the answer depends on which Asian countries are being considered and which indicator is being using to measure trade interdependence. This paper compares the trade interdependence of different sets of Asian countries using various indices. With respect to de jure integration (the signing of free trade agreements [FTAs]), the number of signed FTAs in Asia is growing but the relation between trade interdependence and the signing of FTAs has not been sufficiently studied. The second half of this paper addresses whether de jure trade integration is ultimately brought about by high-level or low-level de facto trade integration.FTAs; trade interdependence; scope of agreements

Re-considering Asian Financial Regionalism in the 1990s

A common view holds that the trend toward Asian financial regionalism is a relatively new phenomenon that became significant after the Asian financial crisis of 1997/98. This paper challenges this view by exploring and analyzing financial regionalist projects in Asia throughout the 1990s. As they demonstrate, Asian countries, especially Japan, have held a strong desire to establish an Asia-only regional cooperation framework at least since the early 1990s. The basic policy stance of the United States (US), in contrast, was to participate in Asian forums and/or itself to propose and establish regional groupings with itself as a member. This competition is crucial to understanding the rise and fall of various regionalist projects. The analysis of Asian financial regionalism from the standpoint of the membership sheds new light on studies of regionalism. Among the important theoretical implications of this empirical study is that by exercising "blocking power" over a regionalist project, an outside power is not simply killing the proposal, but is participating in the proposed regional framework and seeking to influence it. Regionalism can be best understood as a project under which a relatively minor power seeks to establish a framework that excludes more influential states in order to increase its influence within the group.Regionalism; regional cooperation; Asian Monetary Fund (AMF); Chiang Mai Initiative (CMI); membership; blocking power

Examination of the Singapore Shift in Japan's Foreign Direct Investment in Services in ASEAN

Asia is fast becoming the largest recipient of Japan's foreign direct investment (FDI). Within the Asian region, the Association of Southeast Asian Nations (ASEAN) has been the major investment destination of Japan. In the manufacturing sectors, however, the investment flows from Japan to ASEAN—with Thailand being the largest recipient—has been declining. In contrast, Japan’s FDI in the services sectors in ASEAN is growing rapidly. The recent phenomenon of the Singapore Shift in Japan's FDI in the ASEAN services sectors proves interesting. The prominent strategy among Japanese companies is to establish a commercial presence in Singapore, which they expect to be the “hub” of Southeast Asia, thereby enabling them to supply services to the entire ASEAN region. The magnitude of the Singapore Shift varies for every services sub-sector. By comparing transport and logistics with finance and insurance industries, this paper considers the critical determinants of the Singapore Shift.foreign direct investment; services direct investment; japan direct investment; asia services sector; asean services sector

Regionalism Cycle in Asia (-Pacific): A Game Theory Approach to the Rise and Fall of Asian Regional Institutions

Despite a commonplace view that Asian regionalism lacks institutions, Asia, in fact, is full of regional institutions and frameworks in various forms. The rise and fall of regional institutions in Asia is an extremely dynamic process. Using a game theory approach, this paper hypothesizes that the dynamic nature of Asian regionalism can be explained by a "regionalism cycle." The institutional outcome of regionalism in Asia has been cyclical because the game played by Japan and the United States does not have a stable equilibrium. This paper tests the hypothesized regionalism cycle using actual cases of regional institutions in the field of financial cooperation and regional summit meetings.regionalism; Regionalism cycle; Asian Monetary Fund (AMF); East Asia Summit (EAS); Game Theory

The Building Block versus Stumbling Block Debate of Regionalism: From the Perspective of Service Trade Liberalization in Asia

When debating the pros and cons of economic regionalism, haven't we focused enough on trade in goods at the expense of services? This article argues that regionalism is certainly a building block, not a stumbling block to a multilateral trading system, using the services liberalization scheme of Association of Southeast Asian Nations (ASEAN) as a case study. At the same time, it is critical to set out a proper institutional arrangement to ensure that regional services liberalization initiatives reinforce the global services regime. This paper proposes an amendment of the current GATS Article V to define the appropriate relationship between multilateralism and regionalism in the context of services.GATS; AFAS; ASEAN; services; regionalism; free trade; economic integration

Critical Review of East Asia – South America Trade

There is a general consensus that trade between East Asia and South America is becoming increasingly important. However, we know little about the actual dynamic development of this inter-regional trade. This paper examines whether the trend of East Asia–South America trade is a general phenomena or a country- and commodity-specific issue, and whether the increase in trade values has a solid basis in terms of commodity diversification and/or price and quantity effects. While South America has an overall trade surplus with East Asia, detailed country and commodity analysis of inter-regional trade reveal several potential weaknesses in South America’s trade with East Asia. Our research finds that (i) the increase in trade between the two regions can be explained mainly by the increase in the People’s Republic of China’s (PRC) trade with South America, (ii) the increase in the PRC’s imports from South America is limited to a few commodities, (iii) the increase in East Asia’s imports from South America is due partly to commodity price increases, and (iv) the PRC has started to export various types of electronics and machinery products to South America. Overall, East Asia’s exports to South America seem to show more promising signs of growth than South America’s exports to East Asia

Impediments to Growth of the Garment and Food Industries in Cambodia: Exploring Potential Benefits of the ASEAN-PRC FTA

This paper attempts to identify structural constraints to growth and exports within Cambodia’s key industries and to consider the policy actions needed to reduce obstacles to trade. The paper places special emphasis on Cambodia’s exports to the People’s Republic of China (PRC), given the major export opportunities arising from the free trade agreement (FTA) between the Association of Southeast Asian Nations (ASEAN) and the PRC, known as the ASEAN–[People’s Republic of] China FTA (ACFTA). A qualitative case study method was applied at the firm-level by conducting face-to-face interviews to identify the impediments to the growth and exports of key industries in Cambodia, and to examine the opportunities and challenges presented by the ACFTA. This study covers the garment and food industries, which are critical to the economic development of Cambodia in the context of regional and global economic integration. The food industry, with its large number of small and medium-sized enterprises, has great potential for contributing to pro-poor growth in Cambodia, while the textile industry is the largest employer in the Cambodian labor force and is critical for poverty reduction efforts through export-led growth. The study also provides policy recommendations at both the industry and government levels.Cambodian economy; garment industry; food industry; ASEAN-[People’s Republic of] China FTA; firm-level analysis; bribery

Usable Data for Economic Policymaking and Research? The Case of Lao PDR's Trade Statistics

This report assesses the quality of Lao PDR’s trade statistics by comparing Lao PDR’s export/import data with its trade partners’ import/export data (mirror data). While the mirror technique is constrained by the fact that partners’ data also can have some problems, it is a useful method to obtain a snapshot of the quality of trade data.Lao PDR trade statistics, export/import data, trade partner

Accession clause of TPP : Is it really open?

One of the most important policy questions relating to the future impact of the Trans-Pacific Partnership on the global and regional economy is whether other countries in the region, particularly China, will join the partnership. While several commentators have made some observations regarding the future prospects of TPP expansion, little scholarly analysis has been conducted. To go beyond the speculation of a certain country\u27s accession to TPP, we first attempt to generalize the issue before moving on to a specific question. We conduct a comparative analysis of a large number of regional trade agreements for a better understanding of the parameters of RTAs that are critical for membership expansion. This general framework enables us to conduct a systematic examination of specific membership expansion cases, such as China\u27s membership in TPP. The paper also proposes a necessary "accession practice" that truly facilitates new members\u27 participation

Dynamics of investment negotiations between China and Japan : the China-Japan-Korea trilateral investment treaty and beyond

The investment agreement relationship between China and Japan is complex. The many intersecting and overlapping agreements can rightly be described as a "noodle bowl of agreements." The 1989 bilateral investment treaty (BIT) between China and Japan still stands. Japan can also free-ride on the negotiation outcome of China\u27s BITs and free trade agreements (FTAs) with other countries by using the most-favored-nation (MFN) provision in the 1989 China-Japan BIT, which does not contain regional economic integration organization (REIO) exception rules. However, because the China-Japan BIT does not have investor-state dispute settlement (ISDS), it may face implementation problems. The China-Japan-Korea trilateral investment treaty (CJK TIT), in force since 2014, made improvements upon the 1989 BIT, but Japan is not entirely satisfied with the outcome. For Japan, pre-establishment national treatment (NT) and prohibition of various types of performance requirements are the most important negotiation items, but the CJK TIT insufficiently addressed those problems. Moreover, because the CJK TIT has MFN provisions with an REIO exception rule, better access to investment markets brought about by future FTAs such as the China-Korea FTA and the EU-China FTA cannot be imported into CJK TIT. Hence, in the long run, Japan needs to pursue an FTA investment chapter with China that covers both MFN and ISDS