United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Regional Trade Agreements in Asiaand

The Multilateral Trade System

Dr. Brigid GavinUnited Nations University

Comparative Regional Integration Studies

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Outline of Presentation

• ‘New Regionalism’ in Asia• Assessing the Impact of RTAs• WTO Rules on RTAs• Implications for the MTS• Conclusions

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

New Regionalism in Asia• New trend since 1990s• ASEAN FTA in 1992• Goal: Economic Community 2020• ASEAN + 3: Framework Agreements

with China, Japan and South Korea• East Asia: 16 FTAs in exisxtence and

22 under negotiation

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

2 New Aspects• New Direction

– Traditional strong support for WTO– From multilateralism to regionalism?

• New Trade Issues– Slow progress at WTO level– RTAs advance on new issues

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

How to assess RTAs?• Policy makers: Impact

assessment?• Traditional approach to tariffs:

– Trade creation vs. trade diversion

• Recent approach to rule-making: – rules for new trade issues? – Coherence or fragmentation for global

trade?

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

WTO rules for RTAs• RTAs recognised since 1947• WTO rules not clear and precise• New Committee on RTAs: 1996• No progress made on systemic

rules• Current Situation: each RTA judged

on inidvidual basis

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Assessing FTAs in Asia • Manufacturing

– East Asia has already low MFN tariffs – Intensive trade in ‘Factory Asia’– FTAs will contribute few benefits– Risk: rules of origin will increase costs– Need for pan-Asian system of

cumulation

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Agriculture• Agricultural trade relatively small• Currently: sensitive sector• Collapse of Doha Round• Changing patterns of production• China may become major importer• Future: potential for regional trade

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Services• Current FTAs: not beyond GATS• Services growing faster than goods• East Asian countries major

exporters• 2 models of liberalisation: GATS

and NAFTA• Implications for financial services?

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Conclusions

• Too early to say whether ‘building blocks’ or ‘stumbling blocks’

• Benefits: ‘faster’ liberalisation as MTS negotiations are stalled

• Risks: rules of origin and different regulatory models in services

United Nations University - Comparative Regional Integration Studies

UNU/CRIS

Thank you

bgavin@cris.unu.edu