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Begin New Search Topic Regional Integration Publishing Institution Korea Economic Institute of America (KEI)

1. Re-Energizing Economic Integration between South Asia and East Asia

Author:
Pradumna B. Rana
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This chapter focuses on economic integration (linkages) between South Asia and East Asia.2 The topic is important for three reasons. First, South Asia-East Asia (SA-EA) trade is a component of South-South trade and could be a useful buffer should North-South trade soften, or populism lead the North to view trade as a “zero-sum” game, as is presently the case in the United States and several countries in Europe. The withdrawal of the United States from the Trans-Pacific Partnership (TPP) in January 2017 and President Trump’s reiteration of his “America First” trade policy at the 2017 APEC meetings in favor of bilateralism and “fair trade” has generated interest in alternate trade policy options in the EA region.
Topic:
Economy, Regional Integration, Trans-Pacific Partnership, and Trade
Political Geography:
South Asia, East Asia, Asia, South Korea, North Korea, and United States of America

2. Economic Regionalism is Key to Openness and Growth: An ASEAN Perspective

Author:
Sanchita Basu Das
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The 10 members of the Association of Southeast Asian Nations (ASEAN) are involved in several regional economic arrangements, not only their own ASEAN Economic Community (AEC), but also those in a bigger geographic area, such as the ASEAN+1 Free Trade Agreements (FTAs) and the Regional Comprehensive Economic Partnership (RCEP). A subset of these countries are partaking of Asia-Pacific deals, namely the latest Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Asia-Pacific Economic Cooperation (APEC). Some are pursuing bilateral deals in pursuit of deeper economic cooperation. Finally, all ASEAN countries are members of the Belt and Road Initiative (BRI), which although not labelled a trade agreement, is concerned with trade-related measures including transport infrastructure, policy coordination, economic connectivity through trade and investment, customs modernization, financial cooperation, and people-to-people linkages. A common feature of all these trade agreements is that they are not just focused on removing restrictions on trade, i.e. lowering import tariffs and quotas, but are much more comprehensive and include issues like trade in services, investment, labor, intellectual property rights, regulatory standards, and health and safety rules. All of these agreements deal with cooperation measures beyond national borders and can be called deep economic cooperation. They go beyond the WTO framework and are often labeled “new regionalism,” understood as state-led projects in the context of global developments. The extent of deepness varies, mainly depending on the participating countries’ development stage and the economic competitiveness of domestic sectors. What do the ASEAN countries aim to achieve? Theory has elucidated that governments have motives ranging from politics to economics when entering an economic cooperation arrangement. The political motives could be confidence building, i.e. if an international relationship was blemished by a history of conflict, economic cooperation can introduce a process of confidence building.3 For smaller countries, it could be seen as a means to increase bargaining power with the international community. Countries often see economic cooperation as a means to hasten their domestic economic reforms so as to increase attractiveness to foreign investors.4 Governments could follow a regionalism exercise also to defend domestic interests that are threatened by regionalism elsewhere. As for the economic motives, countries prefer cooperation among a limited number of players as it enables continued protection in a bigger geographical space and shuns producers from non-members. This enables them to exclude “politically sensitive,” noncompetitive domestic sectors completely from trade liberalization. Finally, regional economic arrangements are essential for creating economies of scale for producers and offering a larger market for consumers, which increases attractiveness to potential investors. This chapter elaborates on ASEAN’s perspective on economic regionalism in the Asia-Pacific. It examines key initiatives that ASEAN countries are currently negotiating or implementing in their national economies, discusses economic and strategic motives, and views the future of regionalism from an ASEAN perspective. It concludes that although the ASEAN countries are facing some uncertainties in their pursuit of economic regionalism, they will continue to support the endeavor as it serves their economic structure of openness. The countries have realized the benefits of economic integration in terms of confidence building of investors, thereby bolstering economic growth.
Topic:
Economics, Treaties and Agreements, Economic growth, and Regional Integration
Political Geography:
Asia and Southeast Asia

3. Advancing the Regional Trade Order in East Asia with a Less Engaged United States

Author:
Korea Economic Institute of America
Publication Date:
08-2018
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
In the aftermath of Donald Trump’s election and immediate pullout from the TPP, a scramble ensued over how to proceed with constructing a regional trade order centered on East Asia. For China this brought closer scrutiny of its pursuit of the Belt and Road Initiative (BRI). In the case of Japan, questions followed about what to do with the residue of TPP. Others, notably countries in Southeast Asia, were left contemplating the balance between eastern exclusive regionalism and the western presence in regionalism. In the background were efforts in South Asia aimed at advancing economic integration with East Asia. A kind of free-for-all was in progress without the moorings that had been lost after the paradigm of competition between a U.S.-led TPP and a China hub-and-spokes BRI no longer was guiding the strategic calculations of Asian countries. Then, in March 2018 came Trump’s disruptive tariffs, threatening to set a trade war in motion. Four chapters explore the challenge of advancing a regional trade order in East Asia in the new circumstances of 2017-18. Tu Xinquan in Chapter 10 questions whether BRI is a path toward regionalism, delving deeply into the Chinese strategy for BRI. T.J. Pempel follows in Chapter 11 by exploring Japan’s thinking about TPP and the process of refocusing on TPP- 11 following the U.S. withdrawal. Chapter 12 by Sanchita Basu Das offers a hopeful ASEAN perspective on economic regionalism. Finally, in Chapter 13 Pradumna Bickram Rana traces thinking about re-energizing economic integration between South Asia and East Asia. With no finality to the RCEP talks and the recently concluded TPP-11 pact still taking shape and Trump’s “America First” trade policy casting a dark shadow, we aim to capture signs of a new trade order at a time of flux.
Topic:
Economics, Regional Integration, and Trade
Political Geography:
Japan, China, East Asia, Asia, and Korea

4. Progress and Implications of the China-Korea FTA

Author:
Li Si-qi, Tu Xin-quan, and Liu Bin
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The article focuses on the China-Korea FTA, analyzing the background of China-Korea bilateral economic relations, the characteristics of the China-Korea FTA and more importantly, the implications and future prospect of this free trade pact. So far, the China-Korea FTA is considered to be the most comprehensive compared with China's previous FTAs and may be the largest in trade terms among all the FTAs concluded by Korea and China, playing a positive role in advancing economic integration in the Asia-Pacific region. However, with lots of exceptions to tariff elimination and market access, as well as a 20-year transition period, the present version of the China-Korea FTA is far from the best in terms of the depth of liberalization and the scope of obligations on trade and investment rules. The recent bilateral diplomatic tensions due to the decision of deploying the THAAD missile system by the Korean government may also jeopardize bilateral economic ties between China and Korea, and further increase uncertainties of the China-Korea FTA. It remains to be seen whether the Chinese and Korean governments will handle this issue smoothly under the present sensitive political atmosphere and achieve substantial progress in follow-up FTA negotiations on services and investment.
Topic:
Diplomacy, Economics, Bilateral Relations, and Regional Integration
Political Geography:
China, Asia, South Korea, and Korea