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Free Trade Agreements and the Prospects for Regional Integration in East Asia

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  • Razeen SALLY

Abstract

Trade policy in East Asia has switched from non‐discriminatory unilateral liberalization, reinforced by General Agreements on Tariffs and Trade/World Trade Organization (GATT/WTO) commitments, to discriminatory free trade agreements (FTA). The paper surveys the FTA activity of the major regional players: China, the ASEAN countries, Japan, and South Korea. It concludes that emerging FTAs are weak and partial. A hub‐and‐spoke pattern of dirty FTAs will not drive regional economic integration or further integration with the global economy. Rather, it could be a force of regional economic disintegration – especially if the multilateral trading system weakens further. At the same time, FTA activity is distracting attention from the WTO, and, more fundamentally, from unilateral liberalization and domestic structural reforms. Hence, East Asian trade policies need to be rebalanced, with better‐quality FTAs and more focus on the WTO. However, more important than the WTO and FTAs is a fresh spurt of unilateral liberalization and structural reform outside trade negotiations.

Suggested Citation

  • Razeen SALLY, 2006. "Free Trade Agreements and the Prospects for Regional Integration in East Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 306-321, December.
    • Handle: RePEc:bla:asiapr:v:1:y:2006:i:2:p:306-321
    DOI: 10.1111/j.1748-3131.2006.00036.x
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    References listed on IDEAS

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    1. Robert Scollay & John P. Gilbert, 2001. "New Regional Trading Arrangements in the Asia Pacific?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa63, April.
    2. Richard E. Baldwin, 2008. "Managing The Noodle Bowl: The Fragility Of East Asian Regionalism," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(03), pages 449-478.
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    Cited by:

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    2. Shujiro Urata, 2014. "Constructing and multilateralizing the Regional Comprehensive Economic Partnership: an Asian perspective," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 9, pages 239-268, Edward Elgar Publishing.
    3. Rupa Chanda & Sasidaran Gopalan, 2009. "Understanding India's Regional Initiatives with East and Southeast Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 23(1), pages 66-78, May.
    4. Eckhardt, Jappe & Serrano, Omar, 2014. "Economic Integration and Rivalry in Asia: Comparing Regional Trade Strategies of China and India," Papers 762, World Trade Institute.
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    6. Hayat, Khuhawar Khizer & Jianqiu, Zeng, 2013. "Common currency for Asia “now or never”," Economic Modelling, Elsevier, vol. 35(C), pages 170-174.

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