Economic Implications of Deeper Asian Integration
AbstractThe Asian countries are once again focused on options for large, comprehensive regional integration schemes. In this paper we explore the implications of such broad-based regional trade initiatives in Asia, highlighting the bridging of the East and South Asian economies. We place emphasis on the alternative prospects for insider and outsider countries. We work with a global general equilibrium model of the world economy, benchmarked to a projected 2017 sets of trade and production patterns. We also work with gravity-model based estimates of trade costs linked to infrastructure, and of barriers to trade in services. Taking these estimates, along with tariffs, into our CGE model, we examine regionally narrow and broad agreements, all centered on extending the reach of ASEAN to include free trade agreements with combinations of the northeast Asian economies (PRC, Japan, Korea) and also the South Asian economies. We focus on a stylized FTA that includes goods, services, and some aspects of trade cost reduction through trade facilitation and related infrastructure improvements. What matters most for East Asia is that China, Japan, and Korea be brought into any scheme for deeper regional integration. This matter alone drives most of the income and trade effects in the East Asia region across all of our scenarios. The inclusion of the South Asian economies in a broader regional agreement sees gains for the East Asian and South Asian economies. Most of the East Asian gains follow directly from Indian participation. The other South Asian players thus stand to benefit if India looks East and they are a part of the program, and to lose if they are not. Interestingly, we find that with the widest of agreements, the insiders benefit substantively in terms of trade and income while the aggregate impact on outside countries is negligible. Broadly speaking, a pan-Asian regional agreement would appear to cover enough countries, with a great enough diversity in production and incomes, to actually allow for regional gains without substantive third-country losses. However, realizing such potential requires overcoming a proven regional tendency to circumscribe trade concessions with rules of origin, NTBs, and exclusion lists. The more likely outcome, a spider web of bilateral agreements, carries with it the prospect of signficant outsider costs (i.e. losses) both within and outside the region.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6976.
Date of creation: Sep 2008
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-28 (All new papers)
- NEP-CMP-2009-02-28 (Computational Economics)
- NEP-CWA-2009-02-28 (Central & Western Asia)
- NEP-INT-2009-02-28 (International Trade)
- NEP-SEA-2009-02-28 (South East Asia)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Julian Di Giovanni & Andrei A. Levchenko & Jing Zhang, 2013.
"The global welfare impact of China: Trade integration and technological change,"
Economics Working Papers
1388, Department of Economics and Business, Universitat Pompeu Fabra.
- Julian di Giovanni & Andrei A. Levchenko & Jing Zhang, 2013. "The global welfare impact of China: trade integration and technological change," Working Paper Series WP-2013-08, Federal Reserve Bank of Chicago.
- Julian di Giovanni & Jing Zhang & Andrei A. Levchenko, 2012. "The Global Welfare Impact of China: Trade Integration and Technological Change," IMF Working Papers 12/79, International Monetary Fund.
- Julian di Giovanni & Andrei A. Levchenko & Jing Zhang, . "The Global Welfare Impact of China: Trade Integration and Technological Change," Working Papers 625, Research Seminar in International Economics, University of Michigan.
- Siow Yue Chia, 2010. "Trade and Investment Policies and Regional Economic Integration in East Asia," Trade Working Papers 21878, East Asian Bureau of Economic Research.
- Jing Zhang, 2013. "Global Welfare Impact of China: Trade Integration and Technology Change," 2013 Meeting Papers 630, Society for Economic Dynamics.
- Kawai, Masahiro & Zhai, Fan, 2009. "China-Japan-United States integration amid global rebalancing: A computable general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 20(6), pages 688-699, November.
- Andrei A. Levchenko & Jing Zhang, .
"The Global Labor Market Impact of Emerging Giants: a Quantitative Assessment,"
637, Research Seminar in International Economics, University of Michigan.
- Andrei A Levchenko & Jing Zhang, 2013. "The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment," IMF Economic Review, Palgrave Macmillan, vol. 61(3), pages 479-519, August.
- Andrei A. Levchenko & Jing Zhang, 2013. "The global labor market impact of rmerging giants: a quantitative assessment," Working Paper Series WP-2013-10, Federal Reserve Bank of Chicago.
- Rod Tyers, 2014. "International Effects of China’s Rise and Transition: Neoclassical and Keynesian Perspectives," CAMA Working Papers 2014-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Angus Charteris & Niven Winchester, 2010. "Dairy disaggregation and joint production in an economy-wide model *-super-‡ ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 491-507, October.
- Wignaraja, Ganeshan & Ramizo, Dorothea & Burmeister, Luca, 2012. "Asia-Latin America Free Trade Agreements: An Instrument for Inter-Regional Liberalization and Integration?," ADBI Working Papers 382, Asian Development Bank Institute.
- Ken Itakura & Hiro Lee, 2012. "Welfare Changes and Sectoral Adjustments of Asia-Pacific Countries under Alternative Sequencings of Free Trade Agreements," OSIPP Discussion Paper 12E005, Osaka School of International Public Policy, Osaka University.
- Kumagai, Satoru & Hayakawa, Kazunobu & Isono, Ikumo & Keola, Souknilanh & Tsubota, Kenmei, 2013.
"Geographical simulation analysis for logistics enhancement in Asia,"
Elsevier, vol. 34(C), pages 145-153.
- Kumagai, Satoru & Hayakawa, Kazunobu & Isono, Ikumo & Keola, Souknilanh & Tsubota, Kenmei, 2012. "Geographical simulation analysis for logistics enhancement in Asia," IDE Discussion Papers 369, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- John Ballingall & Niven Winchester, 2008. "Food miles: Starving the poor?," Working Papers 0812, University of Otago, Department of Economics, revised Dec 2008.
- Pierluigi Montalbano & Silvia Nenci & Emiliano Magrini, 2014.
"Are the EU trade preferences really effective? A generalized propensity score evaluation of the Southern Mediterranea countries’ case in Agriculture and Fishery,"
Departmental Working Papers of Economics - University 'Roma Tre'
0188, Department of Economics - University Roma Tre.
- Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
- Kawai, Masahiro & Wignaraja, Ganeshan, 2011. "Asian FTAs: Trends, prospects and challenges," Journal of Asian Economics, Elsevier, vol. 22(1), pages 1-22, February.
- Ballingall, John & Winchester, Niven, 2009. "Distance isn’t dead : An empirical evaluation of food miles-based preference changes," NZIER Working Paper 2009/1, New Zealand Institute of Economic Research.
- Siow Yue Chia, 2010. "Trade and Investment Policies and Regional Economic Integration in East Asia," Working Papers id:2993, eSocialSciences.
- Winchester, Niven, 2009. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 819-834, November.
- Masahiro Kawai & Ganeshan Wignaraja, 2009. "The Asian â€œNoodle Bowlâ€:Is It Serious for Business?," Working Papers id:1936, eSocialSciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.