ASEAN’s TRADE AND FOREIGN DIRECT INVESTMENT: LONG-TERM CHALLENGES FOR ECONOMIC INTEGRATION

2016 ◽  
Vol 62 (03) ◽  
pp. 643-680 ◽  
Author(s):  
MASAHIRO KAWAI ◽  
KANDA NAKNOI
Keyword(s):  
Foreign Direct Investment ◽  
Multinational Corporations ◽  
Free Trade ◽  
Economic Integration ◽  
Direct Investment ◽  
Free Trade Area ◽  
Trade Flows ◽  
Asia Pacific ◽  
Asean Member

This paper explores the long-term challenges for economic integration of the Association of Southeast Asian Nations (ASEAN) through trade and foreign direct investment (FDI). The region has emerged as an important production base for global multinational corporations by joining East Asia’s supply chains. While proceeding to establish the ASEAN Economic Community (AEC) by the end of 2015, ASEAN has also forged five major free trade agreements (FTAs) with its dialogue partners (China, India, Japan, Republic of Korea, and Australia–New Zealand) and is currently negotiating the Regional Comprehensive Economic Partnership. In addition, four ASEAN member states have completed Trans-Pacific Partnership negotiations. Econometric evidence suggests that (i) trade flows and inward FDI mutually reinforce each other, i.e., an increase in trade flows stimulates inward FDI and vice versa; (ii) a larger market tends to attract more inward FDI; (iii) FTAs tend to help stimulate inward FDI; and (iv) strong institutions, good physical infrastructure, and low costs of doing business are critical in boosting inward FDI. The paper suggests that in the long run it is ASEAN’s interest to further integrate itself with the rest of Asia and the world (through a Free Trade Area of the Asia-Pacific and an Asia–Europe FTA), while substantially deepening its internal integration (by moving from the AEC to a customs and economic union) and thereby maintaining ASEAN centrality.

scholarly journals Trade flow of manufacturing sector and foreign direct investment in ASEAN economic integration: the gravity model of trade

2021 ◽  
Vol 8 (6) ◽  
pp. 619-630
Author(s):  
Diah Wahyuningsih
Keyword(s):  
Foreign Direct Investment ◽  
Economic Integration ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Trade Flow ◽  
Trade Flows ◽  
Asean Member ◽  
Panel Data Regression ◽  
Data Regression ◽  
Distance Variable

This study aims to determine the effects of ASEAN economic integration on the manufacturing sector's trade flow and foreign direct investment. This study using panel data regression. The results show that ASEAN economic integration affects trade in the manufacturing sector and foreign direct investment (FDI) in ASEAN member countries. The tariff elimination policy increased trade flows in the manufacturing sector and foreign direct investment. The variable of GDP has a positive and significant effect on the manufacturing sector's trade flows and foreign direct investment. Exchange rate variables have a negative and significant effect on trade flows in the manufacturing sector and foreign direct investment. Meanwhile, the distance variable negatively affects trade in the manufacturing sector, but it does not affect foreign direct investment.

Integration Potential of Free Trade Area of the Asia-Pacific

2016 ◽  
Vol 60 (1) ◽  
pp. 68-81
Author(s):  
E. Arapova
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Free Trade ◽  
Economic Integration ◽  
Hybrid Approach ◽  
Free Trade Area ◽  
Hierarchical Cluster ◽  
Asia Pacific ◽  
Trade Area ◽  
Asian Regionalism

During the 2014 APEC summit the participating countries agreed to move towards a region-wide economic integration and approved China-backed roadmap to promote the Free Trade Area of the Asia-Pacific (FTAAP). The paper examines prospects for economic integration in the Asia-Pacific in the framework of 21 APEC participating members. It aims to measure the “integration potential” of the FTAAP on the basis of quantitative and qualitative analysis of the actual statistic data, to explore key obstacles hampering economic integration in the region. The research comes from the theory of convergence and concept of proximity. They suppose that the higher is the degree of homogeneity in economic development and regulatory regimes of the integrating countries the higher is their “integration potential”. The objective of the author’s analysis is to measure the “integration potential” of APEC countries in four directions: trade liberalization, free movement of investments, monetary and banking integration, free division of labor. Initial estimates of the FTAAP prospects base on the merchandize trade complementarity indices and coefficients of variation analysis. Besides, the research uses hierarchical cluster analysis that helps to classify countries in different groups according to similarity of their economic typologies. This methodology allows to reveal the favorable algorithm of regional economic integration in the framework of the “hybrid approach” (or “open regionalism” adopted for APEC countries in 1989) which encourages the countries to enter into free trade agreements on a bilateral basis or to make offers to the APEC membership as a whole. Final conclusions are based on the results of authors’ calculations with consideration for contemporary trends of the member countries’ economic development and long-term strategies of economic growth. Acknowledgements. The research was supported by the Russian Fund for Humanities, project no. 15-07-00026 “East Asian regionalism in the context of diversifi cation of economic growth model”.

scholarly journals IMPACTOS POTENCIAIS DA NEGOCIAÇÃO DA ALCA SOBRE OS INVESTIMENTOS EXTERNOS EM SERVIÇOS PROFISSIONAIS NO BRASIL

2009 ◽  
Vol 21 (40) ◽  
Author(s):  
Michel Alexandre ◽  
Otaviano Canuto ◽  
Gilberto Tadeu Lima
Keyword(s):  
Foreign Direct Investment ◽  
Free Trade ◽  
Direct Investment ◽  
Free Trade Area ◽  
Local Environment ◽  
Center Of Gravity ◽  
Professional Services ◽  
Developed Economies ◽  
Trade Area ◽  
Regulatory Convergence

The paper deals with implications of hypothetical results of the negotiations on the Free Trade Area of the Americas on foreign direct investment in some professional services in Brazil. Based upon the presupposition of regulatory convergence/harmonization, whose center of gravity would be located in the most developed economies, it is discussed the extent to which the local environment for the national producers of those services would change with the possibility of greater presence of international competitors.

scholarly journals The Common Market for Eastern and Southern Africas (COMESA) Free Trade Area (FTA) and Foreign Direct Investment (FDI) Nexus

2019 ◽  
Vol 9 (2) ◽  
pp. 261-286
Author(s):  
Yassin Elshain Yahia ◽  
Haiyun Liu ◽  
Sayyed Sadaqat Hussain Shah ◽  
Hisham Mohamed Hassan Ali ◽  
Md Reza Sultanuzzaman
Keyword(s):  
Foreign Direct Investment ◽  
Free Trade ◽  
Direct Investment ◽  
Free Trade Area ◽  
Common Market ◽  
Trade Area ◽  
The Common

Explaining the resurgence of regionalism in world politics

1995 ◽  
Vol 21 (4) ◽  
pp. 331-358 ◽  
Author(s):  
Andrew Hurrell
Keyword(s):  
Free Trade ◽  
Economic Integration ◽  
Free Trade Area ◽  
World Politics ◽  
Common Market ◽  
Asia Pacific ◽  
Regional Security ◽  
Post Cold War ◽  
Trade Area ◽  
The North

The past decade has witnessed a resurgence of regionalism in world politics. Old regionalist organizations have been revived, new organizations formed, and regionalism and the call for strengthened regionalist arrangements have been central to many of the debates about the nature of the post-Cold War international order. The number, scope and diversity of regionalist schemes have grown significantly since the last major ‘regionalist wave’ in the 1960s. Writing towards the end of this earlier regionalist wave, Joseph Nye could point to two major classes of regionalist activity: on the one hand, micro-economic organizations involving formal economic integration and characterized by formal institutional structures; and on the other, macro-regional political organizations concerned with controlling conflict. Today, in the political field, regional dinosaurs such as the Organization of African Unity (OAU) and the Organization of American States (OAS) have re-emerged. They have been joined both by a large number of aspiring micro-regional bodies (such as the Visegrad Pact and the Pentagonale in central Europe; the Arab Maghreb Union (AMU) and the Gulf Cooperation Council (GCC) in the Middle East; ECOWAS and possibly a revived Southern African Development Community (SADC, formerly SADCC) led by post-apartheid South Africa in Africa), and by loosely institutionalized meso-regional security groupings such as the Conference on Security and Cooperation in Europe (CSCE, now OSCE) and more recently the ASEAN Regional Forum (ARF). In the economic field, micro-regional schemes for economic cooperation or integration (such as the Southern Cone Common Market, Mercosur, the Andean Pact, the Central American Common Market (CACM) and CARICOM in the Americas; the attempts to expand economic integration within ASEAN; and the proliferation of free trade areas throughout the developing world) stand together with arguments for macro-economic or ‘bloc regionalism’ built around the triad of an expanded European Union (EU), the North American Free Trade Area (NAFTA) and some further development of Asia-Pacific regionalism. The relationship between these regional schemes and between regional and broader global initiatives is central to the politics of contemporary regionalism.

scholarly journals Implications of Free Trade Area For Poverty, Household Welfare And Economic Development In Nigeria

2020 ◽  
pp. 1-11
Author(s):  
Idris Abubakar ◽  
Thomas onimisi Abaukaka ◽  
Muhammad Kabir O. Momoh
Keyword(s):  
Economic Development ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Free Trade ◽  
Direct Investment ◽  
Free Trade Area ◽  
Domestic Product ◽  
African Continent ◽  
Trade Area ◽  
Per Capita

Purpose of the study: The study aims to investigate the implications of free trade areas for poverty, household welfare and economic development in Nigeria. Methodology: This study employed a fully modified least squares (FMOLS) regression technique. The income per capita and unemployment out of many macroeconomics indexes were employed in this study to measure welfare and poverty implications of free trade area respectively. To enable the study, determine the policy and decision-making implications of the free trade area on Nigeria economy, historical data were drawn from the central bank statistical bulletin for 27 years. Main findings: The estimated results revealed that the income per capita (welfare) model demonstrated a fair view of free trade scenarios as indicated by the explanatory variables; export contributions to gross domestic product and foreign direct investment contributed positively to the welfare of the individual. Besides, the study also found foreign direct investment and export contributions to gross domestic product to have a negative relationship with unemployment, which implies a reduction in the unemployment rate in Nigeria. Research implications: This study documented that households’ welfare will be increased by free trade area, while unemployment will also be reduced by participating in free trade area. Based on study findings, policies makers, academia, researchers, the and government will find the study relevant in making policies that promote foreign direct investment, export contributions to the growth of the economy and gross domestic product such as reduction in tariff, simplifying trade regulations, increasing the availability of credit to exporters, creations of duty drawback, improving cooperation among economic actors and overall structural changes which will have positive implications on the households welfare, poverty and economic development. The novelty of the study: The relevance for free trade area as one among economic policies to promote the welfare and reduce poverty among nations is gaining momentum globally especially African continent. Given the paucity of studies on this area, the study is undertaken as a framework to determine what the implications of free trade areas will be among the African continent.

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