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Preferential Trade Agreements in Asia: Alternative Scenarios of "Hub and Spoke"

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  • Zhai, Fan

Abstract

The proliferation of preferential trade agreements in Asia may result in a number of hub and spoke configures with Japan, China and ASEAN competing as regional hub of bilateral FTAs. Using a newly developed global CGE model with imperfect competition, increasing return to scale and heterogeneous firm, we explore the potential economic effects of alternative hub and spoke configurations in Asia. The simulations results suggest that the regionalism approach to integration in the Asian context can hardly act as building block of global trade liberalization, if it is confined to shallow integration only. However, the regional trade agreements involving deep integration measures provide promising path towards global free trade.

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  • Zhai, Fan, 2006. "Preferential Trade Agreements in Asia: Alternative Scenarios of "Hub and Spoke"," Conference papers 331509, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331509
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