Corey Wallace
Teaching Fellow, Political Studies, University of Auckland, New Zealand
Youth delegate GM XIX 2010

Keen observers of Asia-Pacific regional integration will not have missed the development of an interesting dynamic in recent years - that of geopolitical competition driving the economic liberalization agenda. The politicization of economic relations and interconnections is of course nothing new. The opening of the American market after World War II to Germany and Japan was a critical part of early US Cold War strategy, as was encouraging Japan to limit its trading relationship with the People’s Republic of China and other Communist governments in Asia. The Soviet Union attempted to forge its own economic bloc through Council of Mutual Economic Assistance (COMECON) at the same time. This was the logic of the Cold War: superpower competition and containment. Geopolitical competition, far from dividing the Pacific, is now having the opposite effect in the post-Cold War era however. While geopolitical considerations have never truly been out of the picture, and indeed the formation of APEC itself was propelled by (often differing) political as well as economic motivations, the last one to two years has seen geopolitical considerations playing a much more explicit role in the decisions that economies have taken regarding the joining of and commitment to various trade pacts and economic frameworks. Read more…

Hugh Stephens
Vice Chair, CANCPEC (Canadian National Committee for Pacific Economic Cooperation)
Fellow, Canadian Defence & Foreign Affairs Institute (CDFAI)

On April 24-25, 2013 the Association of Southeast Asian Nations (ASEAN) will hold its 22nd Leaders’ Summit in Brunei Darussalam. ASEAN, comprised of ten nations in the heart of Asia (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) has been around since 1967 but it is only in recent years that it has taken on its role as the linchpin of economic growth and trade in the region. With a market of 600 million people, ASEAN covers the spectrum of development from advanced service economies like Singapore (per capita GDP about US$50,000, roughly the same as Canada) to economies just emerging from decades of mismanagement like Laos and Myanmar (per capita GDPs of $1303 and $1144 respectively—all figures from UN) to mixed but growing economies like Indonesia, Thailand, Vietnam and Malaysia. Read more…

Peter A. Petri and Michael G. Plummer

© Peter G. Peterson Institute for International Economics. All rights reserved.

SUMMARY

The Trans-Pacific Partnership (TPP) agreement, now in negotiation among nine Asia-Pacific countries, could yield annual global income gains of $295 billion (including $78 billion for the United States) and offers a pathway to free trade in the Asia-Pacific with potential gains of $1.9 trillion. The TPP’s expected template promises to be unusually productive because it offers opportunities for the leading sectors of emerging-market and advanced economies. An ambitious TPP template would generate greater benefits from integration than less demanding alternatives, but it will be harder to sell to China and other key regional partners as the TPP evolves toward wider agreements. The importance of Asia-Pacific integration argues for an early conclusion of the TPP negotiations, without jeopardizing the prospects for region-wide or even global agreements based on it in the future. Read more…

Masahiro Kawai
Dean and CEO, Asian Development Bank Institute

and

Ganeshan Wignaraja
Principal Economist, Office of Regional Economic Integration, Asian Development Bank

The inability to conclude the World Trade Organization (WTO) Doha Development Round has spawned a proliferation of bilateral and plurilateral free trade  agreements (FTAs) across the globe. While East Asia is a relative newcomer to FTAs, the region has seen a dramatic increase in the number of such agreements  in recent years. The explosion of FTAs in East Asia, led by the large economies of Northeast Asia—the People’s Republic of China (PRC), Japan, and the Republic of Korea (ROK)—is tied to the need to support sophisticated production networks through continued trade and investment liberalization, while also serving as a defensive response to the spread of FTAs elsewhere in the world.

A lively debate over the impact of FTAs on business in the region has resulted from their proliferation (see Baldwin 2006, Chia 2010). Data from East Asian  exporters on FTA utilization were lacking prior to an Asian Development Bank (ADB) firm-level multi-country survey conducted in 2007/08. The survey results  suggest that FTAs are indeed bolstering trade among firms, despite some concerns expressed over restrictive rules of origin (ROOs), particularly as economic recovery takes hold in the wake of declining trade volumes and nascent protectionism triggered by the recent global economic crisis. Governments can  facilitate the increased use of FTAs by actively disseminating information to firms on existing FTAs and adopting best practices in designing future FTAs, including ROOs.

East Asian economies are using FTAs to aggressively pursue their individual and collective trade strategies, leading to the expansion of advanced production networks across the region with hubs in Japan and the PRC. Rather than complicating efforts toward a Doha Round agreement, a region-wide FTA can contribute  to laying the foundation for such an agreement.

This brief is set out as follows. It begins by discussing East Asia’s emergence as a global factory and the spread of FTAs. It then examines varieties of national FTA strategies in Northeast and Southeast Asia. The brief goes on to analyze information on FTA use, impediments, and ROOs based on the ADB multi-country survey. Finally, it explores a possible way forward, highlighting short-term measures as well as a region-wide FTA for the medium term. Read more…

Julius Caesar Parrenas, PhD
Senior Advisory Fellow, Institute for International Monetary Affairs (IIMA)1
posted from: http://www.iima.or.jp/pdf/newsletter2010/NLNo_37_e.pdf

The recent G20 and APEC meetings in Seoul and Yokohama underscored the importance of structural reforms. While G20 leaders struggled over the way forward to achieve sustained global economic recovery, APEC leaders went ahead to launch work toward a Free Trade Area of the Asia-Pacific (FTAAP), possibly through the expansion of the Trans-Pacific Partnership (TPP). Embedded in the G20 and APEC leaders’ statements are references to a key issue that will influence the success of current efforts to sustain global recovery and advance free trade.

Annexed to the G20 statement is a document entitled the “Seoul Development Consensus for Shared Growth,” which laid out the framework for future work on “infrastructure, private investment and job creation, human resource development, trade, financial inclusion, growth with resilience, food security, domestic resource mobilization and knowledge-sharing.” The APEC statement referred to a strategy for achieving high-quality growth that is balanced, inclusive, sustainable, innovative and secure, described in detail in a separate document entitled “The APEC Leaders’ Growth Strategy.”

At the heart of this growth strategy is a renewed push for greater balance between domestic and external demand within economies, which is in turn key to addressing huge trade imbalances that have significantly contributed both to the current malaise afflicting the global economy and growing frictions over trade-related issues. This growth strategy hinges on structural reforms to address deep-seated problems that have emerged in the course of one of the longest periods of strong economic performance the world has ever seen. Read more…

Yuen Pau Woo
President and CEO, Asia Pacific Foundation of Canada
From: http://www.asiapacific.ca/editorials/presidents-view

Prime Minister Harper and three of his senior cabinet ministers spent much of the last week at two major international gatherings in Asia. The Seoul G20 meeting on 11-12 November was followed by the annual APEC Leaders’ Summit in Yokohama. The close proximity of these two meetings and their overlapping mandates raise important questions about the rapidly changing structure of global governance and Canada’s place in it. In light of Ottawa’s recent failure to secure a seat on the United Nations Security Council, the issue of Canada’s place in regional and global groupings has come into sharper focus.

Read more…

Peter A. Petri
Brandeis University, Senior Fellow at the East-West Center, and member of the US Asia Pacific Council
This article appeared in Nihon Keizai Shimbun, November 8, 2010 (in Japanese)

The intense debate in the Democratic Party of Japan—on whether Japan should join the Trans-Pacific Partnership (TPP) trade negotiations, an initiative spanning nine countries on both sides of the Pacific, including the United States—has far-reaching implications not just for Japan but for the region and the world.

Many of us in the United States would warmly welcome a positive Japanese decision. By joining the TPP effort, Japan would reenergize the vision of a truly integrated Asia-Pacific economy, as proposed by the leaders of the Asia Pacific Economic Cooperation (APEC) forum in Bogor, Indonesia in 1994.

That beautiful, historic vision remains compelling: it’s hard to imagine a peaceful, prosperous world without a vibrant Asia-Pacific economy at its center. Yet, as leaders gather in Yokohama for the APEC summit this month, economic cooperation in the Pacific is more troubled than it has been for years.

Read more…

Christopher Findlay
University of Adelaide & Vice-Chair AUSPECC
This article is cross-posted from the East Asia Forum website

Japanese politicians are still debating whether Japan should join the Trans-Pacific Partnership (TPP). TPP members are not allowed exclusions. Agriculture is the issue, specifically the domestic political constraints imposed by protection of that sector in Japan. At the same time, the business sector is pushing hard to join.

The TPP builds on the Trans-Pacific Strategic Economic Partnership Agreement which Brunei Darussalam, Chile, New Zealand and Singapore set up in 2006. The TPP negotiating group now includes those four plus Australia, the US, Peru, Vietnam and Malaysia. The Japanese debate brought the TPP back to the headlines and highlighted the questions about the value of the preferential route to trade and domestic reform.

Read more…