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The Shift from "Market-led" to "Institution-led" Regional Economic Integration in East Asia in the late 1990s

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  • Shujiro Urata

Abstract

The paper identifies the changes in the nature of regional economic integration in East Asia from "market-led" to "institution-led" integration in the late 1990s. Before the late 1990s active foreign trade and foreign direct investment (FDI) mainly resulting from trade and FDI liberalization led to greater intra-regional dependence among the countries in East Asia. Indeed, regional production systems have been developed in industries such as electronics, automobiles, and apparel, mainly by the initiatives of foreign companies. After the late 1990s East Asian countries started to show strong interest in regional institutions such as free trade agreements (FTAs) largely because of the outbreak of Asian crisis and growing interest in FTAs in other parts of the world. FTAs are likely to bring economic, political, social and other types of benefits to the region and the rest of the world, but there exist various obstacles to the formation of FTAs. Some serious obstacles are strong opposition to trade and FDI liberalization by non-competitive sectors and a lack of mutual understanding about historic, political, and other issues among East Asian countries. The paper makes several propositions such as increasing mutual exchange of people to overcome these obstacles.

Suggested Citation

  • Shujiro Urata, 2004. "The Shift from "Market-led" to "Institution-led" Regional Economic Integration in East Asia in the late 1990s," Discussion papers 04012, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:04012
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    References listed on IDEAS

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    1. Jeffrey A. Frankel, 1993. "Is Japan Creating a Yen Bloc in East Asia and the Pacific?," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 53-88, National Bureau of Economic Research, Inc.
    2. Jeffrey Frankel & Miles Kahler, 1993. "Regionalism and Rivalry: Japan and the United States in Pacific Asia," NBER Books, National Bureau of Economic Research, Inc, number fran93-1.
    3. Shujiro Urata & Kozo Kiyota, 2003. "The Impacts of an East Asia FTA on Foreign Trade in East Asia," NBER Working Papers 10173, National Bureau of Economic Research, Inc.
    4. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
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    1. Tereso S. Tullao, Jr, . "An Integrative Report," Chapters, in: Tereso S. Tullao, Jr. & Lim Hong Hin (ed.), Developing ASEAN Economic Community (AEC) into a Global Service Hub, chapter 1, pages 1-64, Economic Research Institute for ASEAN and East Asia (ERIA).
    2. Julia Kubny & Florian Mölders & Peter Nunnenkamp, 2011. "Regional Integration and FDI in Emerging Markets," Chapters, in: Ulrich Volz (ed.), Regional Integration, Economic Development and Global Governance, chapter 8, Edward Elgar Publishing.
    3. Vlatka Bilas & Sanja Franc, 2010. "Globalization, Regionalization and Information-Communication Convergence of Africa," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 8(2), pages 104-118.
    4. Giovanni Capannelli & Carlo Filippini, 2010. "Economic Integration In East Asia And Europe: Lessons From A Comparative Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(01), pages 163-184.
    5. Capannelli, Giovanni & Filippini, Carlo, 2009. "East Asian and European Economic Integration: A Comparative Analysis," Working Papers on Regional Economic Integration 29, Asian Development Bank.
    6. Sanchita Basu & Aekapol Chongvilaivan, 2010. "Rationale for Free Trade Agreements (FTAs) in Southeast Asia," Chapters, in: Rajah Rasiah & Johannes Dragsbaek Schmidt (ed.), The New Political Economy of Southeast Asia, chapter 8, Edward Elgar Publishing.
    7. Rajah Rasiah & Johannes Dragsbaek Schmidt (ed.), 2010. "The New Political Economy of Southeast Asia," Books, Edward Elgar Publishing, number 14019.

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