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East Asia Integrates : A Trade Policy Agenda for Shared Growth

Author

Listed:
  • Kathie Krumm
  • Homi Kharas

Abstract

Rapid and sustained growth in international trade has long been a hallmark of successful growth and development strategies in East Asia. Some success stories are well known: those of the newly industrializing economies (NIEs) such as the Republic of Korea, as well as middle-income economies such as Malaysia and the transition economy of China. More recent entrants to world markets that have seen rapid export growth include low-income economies such as Cambodia and Vietnam. Trade has been an important factor in growth in the region, enabling progress in poverty reduction. Although the 1997-98 financial crisis interrupted this progress, recovery since then has brought poverty rates in every emerging economy in the region to record lows, and in economies like that of Vietnam, trade growth has brought with it a rapid reduction in poverty. Intraregional trade in East Asia has grown faster than trade with any other market, and while the largest economies account for the bulk of this trade, the regional trade of most smaller economies has also grown. Trade integration has been marketled, stemming from a combination of unilateral reforms, fulfillment of multilateral commitments, and a pattern of relocation of production processes (see Kawai and Urata 2002). Intraregional trade has been driven not only by growing demand but increasingly by improved competitiveness in regional markets, as reflected in increased market shares (Figure 1). China has been particularly dynamic, but almost all countries increased their competitiveness in regional markets during 1995-2001.9 This increase was accomplished without loss of competitiveness in other markets; East Asia continued to expand its market shares in the European Union (EU) and North American Free Trade Agreement (NAFTA) markets in the same period.

Suggested Citation

  • Kathie Krumm & Homi Kharas, 2004. "East Asia Integrates : A Trade Policy Agenda for Shared Growth," World Bank Publications, The World Bank, number 15038, September.
  • Handle: RePEc:wbk:wbpubs:15038
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    File URL: https://openknowledge.worldbank.org/bitstream/handle/10986/15038/280410PAPER0East0Asia0Integrates.pdf?sequence=1
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    References listed on IDEAS

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    1. Irwin, Douglas A. & Tervio, Marko, 2002. "Does trade raise income?: Evidence from the twentieth century," Journal of International Economics, Elsevier, vol. 58(1), pages 1-18, October.
    2. Sebastián Edwards & Alejandra Cox de Edwards, 1996. "Trade Liberalization and Unemployment: Policy Issues and Evidence from Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 33(99), pages 227-250.
    3. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    4. repec:umd:umdeco:rodriguez9901 is not listed on IDEAS
    5. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    6. Francisco Rodriguez & Dani Rodrik, 2001. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence," NBER Chapters,in: NBER Macroeconomics Annual 2000, Volume 15, pages 261-338 National Bureau of Economic Research, Inc.
    7. Currie, Janet & Harrison, Ann E, 1997. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 44-71, July.
    8. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to Cross-National Evidence," NBER Working Papers 7081, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Asian Development Bank & World Bank & Japan Bank for International Cooperation, 2005. "Connecting East Asia : A New Framework for Infrastructure," World Bank Publications, The World Bank, number 7267, August.
    2. Richter, Kaspar, 2006. "Thailand's growth path : from recovery to prosperity," Policy Research Working Paper Series 3912, The World Bank.
    3. Tubagus Feridhanusetyawan, 2005. "Preferential Trade Agreements in the Asia-Pacific Region," IMF Working Papers 05/149, International Monetary Fund.
    4. Biswajit Nag, 2005. "Trade cooperation and performance in East and South Asia: towards a future integration," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 12(1), pages 1-29, June.
    5. World Bank, 2005. "Thailand : Northeast Economic Development Report," World Bank Other Operational Studies 8808, The World Bank.

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