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East Asian Regionalism: The Need For Asean+3 Fta

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  • Fithra Faisal Hastiadi

    (Graduate School of Asia-Pacific Studies (GSAPS), Waseda University, Tokyo, Japan)

Abstract

For the past few years, regionalism has been progressing in East Asia with the likes of China, Japan, and Korea (CJK) as the most prominent actors. Unfortunately, with the absence of trade arrangement amongst the CJK, the present regional trade scheme is not sufficient to reach sustainability. With the absence of the trade agreements, the present intra regional trade scheme in CJK is not sufficient to meet the target. This paper uncovers the inefficiency of the present scheme through Engle-Granger Cointegration and the Error Correction Mechanism. Moreover, the paper underlines the importance of a triangular trade agreement for accelerating the phase of growth in the region. The paper argues that the spillover effect along with the convergence in terms of trade, Product Complementarities and the nexus between Revealed Comparative Advantage (RCA) with the Intra Industry Trade (IIT) function as economic modalities for creating region-wide FTA. As for this reason, Two Stage Least Squares (2SLS) and static panel fixed effect models are employed. Furthermore, the paper also identifies a number of economic and political factors that can support the formation of East Asian Regionalism.

Suggested Citation

  • Fithra Faisal Hastiadi, 2011. "East Asian Regionalism: The Need For Asean+3 Fta," Journal of Global Business and Economics, Global Research Agency, vol. 3(1), pages 31-56, July.
    • Handle: RePEc:grg:01biss:v:3:y:2011:i:1:p:31-56
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    References listed on IDEAS

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    Cited by:

    1. Shanping Yang & Inmaculada Martínez-Zarzoso, 2013. "A Panel Data Analysis of Trade Creation and Trade Diversion Effects: The case of ASEAN-China Free Trade Area (ACFTA)," Ibero America Institute for Econ. Research (IAI) Discussion Papers 224, Ibero-America Institute for Economic Research.
    2. Arkan Fadhil & Fithra Faisal Hastiadi, 2017. "Dynamics of Service Trade in Association of Southeast Asian Nations: Process Towards Integration," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 714-725.
    3. Shufang Wang & Axing Zhu & Yuejing Ge & Yuli Liu & Xiao Xue, 2017. "The Spatio-Temporal Evolution of Geo-Economic Relationships between China and ASEAN Countries: Competition or Cooperation?," Sustainability, MDPI, vol. 9(6), pages 1-21, June.
    4. Yang, Shanping & Martinez-Zarzoso, Inmaculada, 2014. "A panel data analysis of trade creation and trade diversion effects: The case of ASEAN–China Free Trade Area," China Economic Review, Elsevier, vol. 29(C), pages 138-151.

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    More about this item

    Keywords

    Regionalism; Engle-Granger Cointegration; Error Correction Mechanism; Fixed Effect; Two Stage Least Squares;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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