scholarly journals Free Trade Agreements versus Customs Unions: An Examination of East Asia

2009 ◽  
Vol 8 (2) ◽  
pp. 119-139 ◽  
Author(s):  
Innwon Park ◽  
Soonchan Park
Keyword(s):  
East Asia ◽  
Free Trade ◽  
Computable General Equilibrium ◽  
East Asian ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Computable General Equilibrium Model ◽  
Policy Option ◽  
Customs Unions ◽  
Ex Post

The spaghetti bowl phenomenon expected from the proliferating East Asian regional trade agreements (RTAs) is worrisome. In particular, the complicated web of hub-and-spoke type of overlapping free trade agreements (FTAs) can result in high costs for verifying rules of origin. As an alternative policy option to avoid the negative effect of trade deflection, customs unions (CUs) should be examined. Most of the theoretical analyses on the formation of CUs highlight stronger positive welfare effects compared to FTAs. However, there is a lack of empirical evidence to support the second-best theory of customs unions. This paper is an attempt to fill this gap by applying two methodologies: an ex ante simulation approach and an ex-post econometric approach. We quantitatively estimate the trade effect of CUs and FTAs by adopting a Gravity regression analysis. In general, we find that a CU is a superior type of RTA to an FTA in terms of creating more intra-bloc trade. In addition to analyzing the trade effects of RTAs according to type, we quantitatively evaluate the welfare and output effects of CUs for East Asia (an ASEAN+3 CU and a China-Japan-Korea CU) compared to FTAs by applying a computable general equilibrium model analysis. The East Asian CUs adopt a system of common external tariffs (CET) based on simple-averaged, import-weighted, consumption-weighted, and minimum rates. Overall, we find that the ASEAN+3 CU with the minimum CET are the most desirable type of RTA for both East Asian member countries and the world economy as a whole.

Bilateral Free Trade Agreements: Boon or Bane for Regionalism in East Asia and the Asia-pacific?

2005 ◽  
Vol 4 (2) ◽  
pp. 287-314 ◽  
Author(s):  
Christopher Dent
Keyword(s):  
Structural Foundation ◽  
East Asia ◽  
Free Trade ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The United States ◽  
Asia Pacific ◽  
Distant Future

AbstractSince the late 1990s there has been a rapid proliferation of bilateral free trade agreement (FTA) projects in East Asia and the Asia-Pacific, regions previously largely devoid of FTA activity by comparison to others. As this trend has intensified, so have discussions on whether it will help advance regional co-operation and integration. This paper examines the nature of FTAs themselves and the main causes of East Asia and Asia-Pacific FTAs. The 'lattice regionalism' hypothesis is considered: whether dense economic bilateralism provides a sub-structural foundation on which economic regionalism (i.e. co-operation and integration) can build. Closely related is the issue of competing FTA models and modalities in the Asia-Pacific, and special attention is afforded to the 'asymmetric neoliberal' FTA model of the United States and the 'developmental–industrial' FTA model championed by Japan. It is argued that the contrasts between these make the emergence of an Asia-Pacific FTA unlikely in even the distant future. Japan's FTA model is also considered relative to perhaps East Asia's most important FTA project, the ASEAN–China FTA (ACFTA), and we discuss how bilateral FTA developments in the region more generally may or may not lead to enhanced regional economic co-operation and integration in East Asia.

scholarly journals The Endogeneity Of Association Agreements And Their Impact On Trade For Eastern Countries: Empirical Evidence For Romania

2011 ◽  
Vol 7 (1) ◽  
Author(s):  
Christophe Rault ◽  
Ana Maria Sova ◽  
Robert Sova
Keyword(s):  
European Union ◽  
Free Trade ◽  
Positive Impact ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Trade Flows ◽  
Economic Literature ◽  
Association Agreement ◽  
European Union Countries

The main goal of regionalization is the creation of free trade areas and the guarantee for countries to accede to a widened market. Many studies dealing with the effects of regional free trade agreements on trade flows already exist in economic literature and the increase of regional agreements among nations has recently stressed the key role of regionalization. However, the effects of agreements on trade have not yet been clearly determined in those studies. Our research in this paper aims at reassessing the genuine role of associations. For this matter, we particularly study the association of Romania with European Union countries. Our econometric analysis based on qualitative choice models highlights in particular why European countries chose to conclude an association agreement with Romania, and stresses the fact that European Union countries select endogenously the conclusion of association agreements. We also find a 29% positive impact of the association agreement on Romanian export performances.

scholarly journals INSTITUTIONS AND INTRA-REGIONAL TRADE IN CEFTA 2006: A GRAVITY APPROACH

2019 ◽  
Vol 1 (17) ◽  
pp. 11
Author(s):  
Łukasz Klimczak ◽  
Jelena Trivić
Keyword(s):  
Free Trade ◽  
Bilateral Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Trade Flows ◽  
Positive Sign ◽  
Regional Trade ◽  
Bilateral Trade Flows ◽  
The Impact

The purpose of this paper is to identify factors that had an influence on bilateral trade flows among the CEFTA countries with special emphasize: 1) on the role of CEFTA agreement and its preceding network of bilateral free trade agreements, and 2) on the role of institutions in facilitating intra-regional trade. In order to assess the impact of these variables on trade, we employed an augmented gravity model based on panel data of the CEFTA countries in fifteen years period (2000-2014). The results of the research suggest that there was a positive and statistically significant role of the CEFTA agreement on trade between its parties but the influence of the preceding bilateral free trade agreements was even higher. Results also showed that institutions can play an important role as trade facilitators, but mainly in the importing country while in the exporting country only three of six variables showed to have a positive sign.

Merger will strengthen Japan's shipping sector

2016 ◽  
Keyword(s):  
East Asia ◽  
Free Trade ◽  
Free Trade Agreements ◽  
Trade Agreements ◽  
Global Market ◽  
Shipping Industry ◽  
Content Type ◽  
International Shipping ◽  
South Korean ◽  
Retail Prices

Subject Developments in the Japanese shipping industry and the international shipping market. Significance Three of Japan’s largest shipping lines -- Nippon Yusen Kaisha, Mitsui OSK and Kawasaki Kisen Kaisha -- plan to consolidate their operations in July 2017 to save an estimated 1 billion dollars per year. The three lines combined will control an estimated 7% of the global market, and expand their share of the increasingly critical trans-Pacific market, which has realigned significantly in response to the bankruptcy of South Korean shipping firm Hanjin in August. Impacts This major consolidation may prompt other carriers in other states to follow suit. Powerful new opposition to free trade agreements in major economies will lead to previously unexpected trade contractions. Retail prices for goods imported from East Asia will likely rise.

How Free Trade Agreements Affect Exports and Imports in Vietnam

2017 ◽  
Vol 33 (5E) ◽  
Author(s):  
Nguyen Thi Hoang Oanh
Keyword(s):  
International Trade ◽  
Free Trade ◽  
World Economy ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Flows ◽  
Hub And Spoke ◽  
The Impact

The important year of 1995 marked Vietnam’s first integration as a member of ASEAN. By 2016, Vietnam had negotiated, signed, and implemented sixteen free trade agreements. They include both multilateral and bilateral free trade agreements such as the China-ASEAN, Vietnam-Chile, and Vietnam-Japan agreements. By signing free trade agreements Vietnam can increase trade flows in bilateral and multilateral developed-country FTA scenarios. Trade creation and diversion can be found in multilateral developing-country FTA scenarios and the author finds the impacts of each free trade agreement is different if analyzed for each 2-digit commodity. Keywords Free trade agreement, trade, import, export.t commodity References [1] Baier, S.L., Bergstrand, J.H., “Do free trade agreements actually increase members’ international trade?”, Journal of International Economics, 71 (2007), 72-95.[2] Chong, Soo Yuen & Hur, Jung, “Small Hubs, Large Spokes and Overlapping Free Trade Agreements”, The World Economy, 10.1111/j (2008), 1467-9701.[3] Hur, J., Alba, J. D., & Park, D., “Effects of hub-and-spoke free trade agreements on trade: A panel data analysis”, World Development, 38 (2010) 8, 1105-111.[4] McDonald, S. & Walmsley, Terrie, “Bilateral Free Trade Agreements and Customs Unions: The Impact of the EU Republic of South Africa Free Trade Agreement on Botswana”, The World Economy, 10.1111/j (2008),1467-9701.[5] Pan, S., Welch, M., Mohanty, S., Fadiga, M., & Ethridge, D., “Welfare analysis of the Dominican Republic-Central America-United States free trade agreement: The cotton textile and apparel industries”, The International Trade Journal, Vol. XXII (2008) 2, 1521-0545.[6] Benedictis, L., Santis, R., Vicarelli, C., “Hub-and-Spoke or else? Free trade agreements in the “enlarged” European Union”, The European Journal of Comparative Economics, 2 (2005) 2, 245-260.[7] Nguyen, Q.H., & Nguyen, T.H., “The impact of free trade agreement on trade flow of goods in Vietnam”, Vietnam Economist Annual Meeting, 2015[8] Das, R.U., Rishi, M., Dubey, J.D., “Asean plus six and successful FTAS: Can India propel intra-industry trade flows?”, The Journal of Developing Areas, 50 (2016) 2.[9] Hayakawa, K., “Impact of diagonal accumulation rule on FTA utilization: Evidence from bilateral and multilateral FTAs between Japan and Thailand”, J. Japanese Int. Economies, 32 (2014), 1-16.[10] Jennifer Y. Leung, “Bilateral vertical specialization between the U.S. and its trade partners - before and after the free trade agreements”, International Review of Economics and Finance, 45 (2016), 177-196.[11] Jongwanich, J., & Kohpaiboon, A., “Exporter responses to FTA tariff preferences: evidence from Thailand”, Asian Pacific Economic Literature (2017).[12] Lakatos, C., & Walmsley, T., “Investment creation and diversion effects of the ASEAN-China free trade agreement”, Economic Modelling, 29 (2012), 766-779.[13] Vanhnalat, B. at el., “Assessment the Effect of Free Trade Agreements on Exports of Lao PDR”, International Journal of Economics and Financial Issues, 5 (2015) 2, 365-376.[14] Vietnam Chamber of Commerce and Industry (VCCI), “Freedom of international trade in Vietnam”, Research report, Vietnam, 2015.

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