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Should East Asia go regional? No, no and maybe


  • Panagariya, Arvind


The author studies the case for three different approaches to regionalism in East Asia. First, he examines closely the only serious attempt at preferential trading in the region - the Association of Southeast Asian Nations (ASEAN), which has recently announced plans to form the ASEAN Free Trade Area (AFTA). Conclusion: the costs of such subregional schemes far outweigh their expected benefits. Second, he evaluates the case for a formal East Asian trading bloc along the lines of the European Community, and concludes that although the threat of such a bloc may serve some purpose, its actual execution might be difficult, given the diverse levels of protection across different countries in the region, and the possibility of retaliation from the United States through increased protection against East Asian goods. Third, he examines the case for simultaneous, most favored nation-style, nondiscriminatory regionwide liberalization. The author argues that although such a regional approach may be feasible, the case for it is far from airtight. On the one hand, this approach will face less resistance from the United States, and is likely to promote an open world trading systemin the long run. On the other hand, in the short run it is likely to be resisted because of the adverse effect on terms of trade in the participating countries.

Suggested Citation

  • Panagariya, Arvind, 1993. "Should East Asia go regional? No, no and maybe," Policy Research Working Paper Series 1209, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1209

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    References listed on IDEAS

    1. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters,in: Developing Countries in the World Economy, chapter 14, pages 323-357 World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Dhar, Sumana & Panagariya, Arvind, 1994. "Is East Asia less open than North America and the European Economic Community? No," Policy Research Working Paper Series 1370, The World Bank.
    2. Arvind Panagariya, 1999. "The Regionalism Debate: An Overview," The World Economy, Wiley Blackwell, vol. 22(4), pages 477-512, June.
    3. Foroutan, Faezeh, 1998. "Does membership in a regional preferential trade arrangement make a country more or less protectionist?," Policy Research Working Paper Series 1898, The World Bank.
    4. Rolf Langhammer, 1995. "Regional integration in East Asia. From market-driven regionalisation to institutionalised regionalism?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 131(1), pages 167-201, March.
    5. Bhattacharya, Swapan K. & Bhattacharyay, Biswa N., 2007. "An empirical analysis on prospects and challenges of BIMSTEC-Japan trade integration," Journal of Asian Economics, Elsevier, vol. 18(3), pages 509-536, June.
    6. Biswa N Bhattacharyay & Swapan K. Bhattacharya, 2010. "Free Trade Agreement between People’s Republic of China and India: Likely Impact and Its Implications to Asian Economic Community," Working Papers id:3272, eSocialSciences.


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