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1. Understanding East Asian Cross-Regionalism: An Analytical Framework

Author:
Mireya Solís and Saori N. Katada
Publication Date:
06-2007
Content Type:
Journal Article
Institution:
University of British Columbia
Abstract:
A key feature of East Asian FTA diplomacy remains unacknowledged and, therefore, unaccounted for: the activism displayed in seeking preferential trading relations with countries outside the region. While European and North American countries have also pursued cross-regional trade agreements (CRTAs), East Asia is unique in pursuing extra-regional partnerships before consolidating the regional trade integration process. This framework article identifies the common patterns and fundamental factors behind the East Asian governments' moves towards establishing CRTAs. After laying out the conventional arguments—ranging from the extra-regional market dependence, the region's security arrangements, and economic and political motives behind East Asia's extra-regional interests—the article introduces the novel concept of "leverage." This notion highlights how cross-regional and intra-regional FTA initiatives are intimately linked: East Asian countries frequently choose an extraregional FTA partner in order to break regional inertias that hinder integration, to win domestic battles, and to appropriate extra-regional negotiation modalities that they can use in their subsequent intra-regional FTA negotiations. The article concludes with a summary of the findings from the country cases, and the policy implications of East Asia's porous regionalism, with its heavy doses of cross-regional trade initiatives.
Topic:
Diplomacy
Political Geography:
East Asia and North America

2. Forming a Cross-Regional Partnership: The South Korea-Chile FTA and its Implications

Author:
Sung-Hoon Park and Min Gyo Koo
Publication Date:
06-2007
Content Type:
Journal Article
Institution:
University of British Columbia
Abstract:
CRTAs have become a main feature of South Korea's newly found enthusiasm for a multi-track FTA strategy. In this study, we examine the rise of South Korea's aggressive FTA initiatives, with a special focus on the first cross-Pacific FTA, namely the South Korea-Chile FTA, and draw implications for South Korea's other RTA initiatives. South Korea's motivations to pursue CRTAs are complex. These include economic, political and diplomatic/leverage motives. South Korea's policy departure from its long-standing support for the multilateral trading system began with its FTA negotiations with Chile, a country located on the opposite side of the globe. Aside from the South Korea-Chile FTA, South Korea has been negotiating a number of other CRTAs. Most importantly, South Korea and the US began to negotiate a bilateral FTA in June 2006, the successful conclusion of which will have significant economic and strategic repercussions not only for South Korea but also for its neighboring East Asian countries. The economic and strategic motivations of the political leadership, as well as the new bureaucratic balance of power centered on the Office of the Minister for Trade, have played a significant role in South Korea's dramatic rush toward RTAs. Although South Korea's pursuit of RTAs does not necessarily mean that it has completely abandoned the multilateral trading system, the policy departure is increasingly becoming obvious and significant.
Topic:
Diplomacy
Political Geography:
United States, South Korea, and Chile

3. The Japan-Mexico FTA: A Cross-Regional Step in the Path towards Asian Regionalism

Author:
Mireya Solís and Saori N. Katada
Publication Date:
06-2007
Content Type:
Journal Article
Institution:
University of British Columbia
Abstract:
By most accounts, Japan and Mexico remain distant economic partners with only a modest volume of bilateral trade and foreign direct investment, and a large geographical and cultural gulf between them. By this depiction, the Japanese decision to negotiate with Mexico is puzzling if not downright nonsensical: Why would Japan invest so much political capital in the negotiation of a complex free trade agreement (FTA) with a nation accounting for such a minuscule share of its international economic exchange? Solís and Katada challenge this interpretation of Japan's second bilateral FTA ever, and demonstrate that far from being irrational or insignificant, the stakes involved in the Japan-Mexico FTA were very high, and that this crossregional initiative stands to exert powerful influence over the future evolution of Japan's shift towards economic regionalism. For a number of Japanese industries (automobiles, electronics and government procurement contractors) negotiating with Mexico was essential to level the playing field vis-à-vis their American and European rivals, which already enjoyed preferential access to the Mexican market based on their FTAs. For the Japanese trade bureaucrats, negotiations with Mexico offered an opportunity to tip the domestic balance in favour of an active FTA diplomacy, despite the opposition of the agricultural lobby. Negotiations with Mexico constituted a litmus test, both for the Japanese government and in the eyes of potential FTA partners in Asia, on whether Japan could offer a satisfactory liberalization package to prospective FTA partners to make these negotiations worthwhile.
Topic:
Diplomacy
Political Geography:
Japan, America, Asia, and Mexico

4. Southeast Asian Cross-Regional FTAs: Origins, Motives and Aims

Author:
Stephen Hoadley
Publication Date:
06-2007
Content Type:
Journal Article
Institution:
University of British Columbia
Abstract:
This article surveys the free trade agreement (FTA) initiatives of three governments: Singapore, Thailand and Malaysia. It examines each in a search for motives, not only for negotiating FTAs within the region but also for reaching outside Asia to find negotiating partners. It finds that the presumption of economic gain as the primary motive must be qualified because the markets of many of the extra-regional partners are relatively small in Asian terms, and their trade and investment barriers are already amongst the lowest in the world. This is especially true of New Zealand and Chile, which nevertheless are becoming popular extra-regional partners for Asian governments. While the national and sectoral economic motives announced by the trade spokespeople for Singapore, Thailand and Malaysia are acknowledged as predominant, this article goes beyond such declarations to explore the explicit and implicit diplomatic, political and bureaucratic aims that could account more fully for these trade negotiation initiatives. In accordance with the conceptual analysis presented by Solís and Katada in this issue of Pacific Affairs, the drivers of FTAs are grouped into three broad categories: 1) economic motives; 2) security and diplomatic motives; and 3) leverage motives. Seven hypotheses derived from these categories are employed to guide this survey of recent FTA initiatives by Singapore, Thailand and Malaysia, and to explore their reasons for engaging with FTA partners both outside and within the Southeast Asian region.
Topic:
Security and Diplomacy
Political Geography:
Malaysia, Singapore, Thailand, and Southeast Asia