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Are Regional Trade Agreements in Asia Stumbling or Building Blocks? Some Implications for the Mekong-3 Countries

  • Patrizia Tumbarello
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    Is the recent proliferation of Regional Trade Agreements (RTAs) in Asia a healthy development, or runs the risk of turning into an unmanageable "noodle bowl" in the future? The goal of this paper is to shed some light on this question. The results show that membership in the Asian RTAs considered in this study have not, to date, occurred at the expense of trade with nonmembers, as most Asian countries' integration with the global economy preceded regional integration. However, looking forward, given their discriminatory nature, a proliferation of RTAs, which is not accompanied by continuing unilateral and multilateral liberalization, could run the risk of leading to costly trade diversion.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/53.

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    Length: 27
    Date of creation: 01 Mar 2007
    Date of revision:
    Handle: RePEc:imf:imfwpa:07/53
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    1. Philippa Dee & Jyothi Gali, 2005. "The Trade and Investment Effects of Preferential Trading Arrangements," NBER Chapters, in: International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14, pages 133-176 National Bureau of Economic Research, Inc.
    2. Richard Baldwin, 1993. "A Domino Theory of Regionalism," NBER Working Papers 4465, National Bureau of Economic Research, Inc.
    3. James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
    4. Deltas, George & Desmet, Klaus & Facchini, Giovanni, 2006. "Hub-and-Spoke Free Trade Areas," CEPR Discussion Papers 5960, C.E.P.R. Discussion Papers.
    5. Ghosh, Sucharita & Yamarik, Steven, 2004. "Are regional trading arrangements trade creating?: An application of extreme bounds analysis," Journal of International Economics, Elsevier, vol. 63(2), pages 369-395, July.
    6. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
    7. Tubagus Feridhanusetyawan, 2005. "Preferential Trade Agreements in the Asia-Pacific Region," IMF Working Papers 05/149, International Monetary Fund.
    8. Fukunari KIMURA, 2006. "International Production and Distribution Networks in East Asia: Eighteen Facts, Mechanics, and Policy Implications," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(2), pages 326-344.
    9. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August.
    10. Haveman, J-D & Hummels, D, 1996. "Trade Creation and Trade Diversion : New Empirical Results," Papers 96-004, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
    11. Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
    12. Patrizia Tumbarello, 2005. "Regional Trade Integration and WTO Accession; Which is the Right Sequencing? An Application to the Cis," IMF Working Papers 05/94, International Monetary Fund.
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