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Regional Integration, Sectoral Adjustments and Natural Groupings in East Asia

Author

Listed:
  • Hiro Lee

    (Osaka School of International Public Policy,Osaka University)

  • Dominique van der Mensbrugghe

    (The World Bank)

Abstract

Although East Asian countries were relatively inactive in signing free trade agreements (FTAs) until the end of 1990s, a number of FTAs involving East Asian countries have been signed since the turn of the century. Because sectoral interests can exert significant influence on policy negotiations, the sectoral results would be particularly important for political economy considerations. The objective of this study is to compare welfare gains and sectoral adjustments resulting from various FTA scenarios in East Asia using a dynamic global computable general equilibrium (CGE) model. The RCA rankings of commodities with various FTA scenarios and those with the global trade liberalization are correlated to examine how gnatural h each grouping would be. The results suggest that the ASEAN+3 FTA, with relatively large welfare gains and small structural adjustments, could be a facilitating intermediate step towards global free trade. Some of the smaller FTAs, such as the ASEAN-China and ASEAN-Korea FTAs, would result in large structural adjustments for ASEAN countries.

Suggested Citation

  • Hiro Lee & Dominique van der Mensbrugghe, 2007. "Regional Integration, Sectoral Adjustments and Natural Groupings in East Asia," OSIPP Discussion Paper 07E008, Osaka School of International Public Policy, Osaka University.
  • Handle: RePEc:osp:wpaper:07e008
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    References listed on IDEAS

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    Cited by:

    1. Yu Sheng & Hsiao Chink Tang & Xinpeng Xu, 2014. "The impact of the ACFTA on ASEAN--PRC trade: estimates based on an extended gravity model for component trade," Applied Economics, Taylor & Francis Journals, vol. 46(19), pages 2251-2263, July.

    More about this item

    Keywords

    Regional integration; FTA; RCA; East Asia; CGE model;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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