IB Tutorial 6

8/14/2019 IB Tutorial 6

http://slidepdf.com/reader/full/ib-tutorial-6 1/18

“NEW REGIONALISM” IN ASIA: A

COMPARATIVE ANALYSIS OFEMERGING REGIONAL AND

BILATERAL TRADING AGREEMENTS

INVOLVING ASEAN, CHINA ANDINDIA

Rahul Sen



WHAT’S “NEW REGIONALISM”?

Resemblance of ongoing phenomenon

of proliferation of bilateral and regionaltrading agreements in the Asia-Pacific,

especially in the aftermath of theregional financial crisis.



INTRODUCTION

Rapid proliferation of wave of “newregionalism” among Asian economies over thepast decade

More diverse in scope and coverage thantraditional Free Trade Agreements (FTAs)

Phenomenal proliferation of bilateralism due to: Slow pace of progress of multilateral trades

negotiations in WTO

Bilateral trade serves key diplomatic and securityends



INTRODUCTION

Agreements aimed at ‘deeper integration’among trading partners – termed asEconomic Partnership Agreements (EPAs)

“Stumbling block” vs “building block”

Applying models of modern trade theory and

similar modelling techniques to understandthe phenomenon and its implications ischallenging



OBJECTIVE OF PAPER

Provides a comparative analysis of theongoing bilateral and regional initiativesinvolving ASEAN, China and India

Attempts to analyse the similarities anddifferences among ASEAN, China and Indiawith respect to the negotiating framework,coverage of issues and depth of its

commitments



KEY FINDINGS

Concerns from new regionalism

Discriminatory against non-members

Potential trade diversion

Inefficient utilisation of scarce resources thatcould be devoted towards multilateral

negotiations in WTO

Applicability and consistency in negotiatingframework of overlapping member countries



KEY FINDINGS

Perceived benefits from new regionalism

Act as catalyst in enhancing the pace of multilateral trade liberalisation

Facilitate government to initiate domesticeconomic reforms

Member countries are committed to maintainingpeace and stability amongst themselves



KEY FINDINGS

Trade in Goods

Exclusion of few products from tariff reductions isinsignificant

Non-tariff barriers are progressively reduced and canonly impose those permitted under the WTO

Rules of Origins (RoOs) differ across different FTAs thatcould increase compliance costs for adhering to these

RoOs

Application of RTA safeguard measures as part of FTA



KEY FINDINGS

Trade in Goods

Adhering to WTO principles on trade remediesfor most RTAs

Timelines for negotiations and implementationvary significantly across BTAs

Trade Facilitation

Facilitation of trade flows through closer customscooperation and mutual recognition of standardsand conformity assessment



KEY FINDINGS

Trade in Services

Allow foreign service providers to supply service toit’s RTAs partner

Enhance cooperation in services to improveefficiency and competitiveness

Diversify the supply and distribution of supply

Mutual recognition of qualification, certification andlicensing requirements

E.g. Singapore’s enforced RTAs with US and Australia



KEY FINDINGS

Mutual recognition of qualification & licensingrequirements e.g. S’pore’s enforced RTA with USA has provisions for

recognising degrees from certain US Law Schools that wouldallow their graduates to practise in S’pore

Temporary Movement of Natural Person Stay in partner countries extended

Government Procurement Private business in one country to sell goods and services

to governments to their RTAs partners



KEY FINDINGS

Investments BTA objective is to create a liberal, facilitative,

transparent & competitive investment regime

BTA investment negotiations focuses on:

1. Issues of market access

2. Treatment of foreign investments

3. Repatriation of profits

4. Expropriation & compensation5. Investor protection

6. Harmonisation of business laws



KEY FINDINGS

Intellectual Property Protection Relevant for countries with a huge emphasis on

innovation and R&D in InfoComm Technology

Should respect copyright rules & patent

protection to maintain a competitive advantage

E.g. S’pore – USSFTA prevents piracy of copyrighted works over the Internet,

criminalizing unauthorized reception &distribution of satellite signals & allowing allinventions to be patented



KEY FINDINGS

Competition Policy Prohibits anti-competitive business practices to

provide a level playing field for foreign investors

Exchange of info reagrding any prevailing anti-

competitive practices Periodic review of progress of competition

policies are conducted

E.g.. S’pore – USSFTA states that Govt Linked

Companies (GLC) will be commerically run & theS’pore govt will not interfere with commercialdecisions of GLCs (such as SingTel, SIA).



KEY FINDINGS

Dispute Resolution Mechanism

Provision for quick and efficient resolution of trade disputes in all agreements

Private sector allowed a limited role to invokedispute under investor-state dispute settlementin Singapore’s BTAs and TAFTA

Enforcement is crucial for businesses to minimizerisks from using such mechanism for bilateraldispute resolution



KEY FINDINGS

Broader Areas of Economic Cooperation

Strengthening bilateral economic cooperation in adiverse range of areas

Commitment towards developing longer-termcooperative relationship, enhancing trust andconfidence in each other

Significant for long-term strategic and socio-economicrelations among member countries

Basis for deeper economic integration



KEY FINDINGS

Convergence or Divergence?

Exhibit wide differences in scope and coverage of tradeliberalisation

Minimal degree of commonality is observed in some of the broad issues covered in the RTAs/BTAs

Unlikely for ASEAN to undertake common negotiatingpositions

Member countries undertake important domestic andexternal sector reforms, but unlikely to be welfareenhancing in their own end unless concomitantunilateral liberalisation is also pursued



CONCLUSION

Increasing recognition among Asian policy-makers thatgreater economic coordination and cooperation is essentialto manager globalisation challenges and to enhance its rolein world affairs

Multilateralism is indispensable to a well-ordered, open andrational international trading system, and cannot be ignoredat the expense of bilateralism to pursue global free trade

Pursual of unilateral liberalisation would be essential for

developing countries to gainfully benefit from tradeliberalisation at the bilateral and multilateral level

Documents

IB Tutorial 6