Freeing trade in Asia - Pacific: comparative analysis of ... · Based on the paper “Mapping PTAs in Asia and the Pacific” (on CD) Mia Mikic TID, ESCAP [email protected] WTO/ESCAP Third

APTIAD

Session 4: Research update on regional Session 4: Research update on regional trade arrangements and emerging trade arrangements and emerging 

issuesissuesBased on the paper Based on the paper ““Mapping PTAs in Asia and the PacificMapping PTAs in Asia and the Pacific””

(on CD)(on CD)

Mia MikicMia MikicTID, ESCAPTID, [email protected]@un.org

WTO/ESCAP Third ARTNeT Capacity Building Workshop on WTO/ESCAP Third ARTNeT Capacity Building Workshop on Trade Research Trade Research 

2626‐‐30 March 2007, ESCAP, Bangkok30 March 2007, ESCAP, Bangkok

APTIAD

Outline of presentation

• Introduction• Status of RTAs in ESCAP region • Status of research on RTAs ‐ Emerging generalizations

• Which ways forward?

APTIAD

Introduction: APTIADwww.unescap.org/tid/aptiad

125 PTAs

SEARCH

http://www.unescap.org/tid/aptiad

APTIAD

Introduction: ProliferationAsia -Pacific

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PTAs

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PTAsUnder negotiationCumulative

APTIAD

Status of RTAs in ESCAP: facts• Bilateralism option• Large number of “regulations of commerce” mutually 

conflicting and mismatching and not compliant with GATT Art XXIV

• Number of agreements in implementation per country (much) smaller than number of agreements under negotiations

• If MFN‐WTO is for the rules, and RTA for trade liberalization, then RTA are not delivering it either 

• Trade diversion not significant (?)– Agreements to increase trade– Agreements for non‐trade (non‐economic) objectives

APTIAD

Status of RTAs: Bilateral option

PTA87

BTA62

(48 R + 14XC)

Country-bloc11

RTA11

FTA50

FA7

CU and others

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FTA4

FA6

Others1

FTA4

FA2

CU and others

5

APTIAD

Status: Noodle bowl effect

APTIAD

Status: Multiple memberships

APTIAD

Status: ‘trade‐less’ agreements

Share in total ESCAP trade

2005 (%)

Share in total world trade 2005 (%)

BTAs (61 BTAs) 16.2 4.7- Regional (33 BTAs) 6.6 1.9- Other (28 BTAs) 9.6 2.8RTAs (11 RTAs) 13.2 3.9- Regional (6 RTAs) 10.2 3.0Total preferential trade 29.4 8.6Total ESCAP trade 29.2

APTIAD

Status: ‘trade‐less’ agreements

APTIAD

Status: “Beyond the goods” sectoral coverage

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Labour mobility Competition Gov. procurement Services Trade facilitation IPR Investment

All agreements RTAs

APTIAD

Status of research on RTAs

• Systemic ‐ relationship to multilateralism– motivation for inter‐country cooperation [Low, 2007‐ARTNeT slides]

– stumbling blocs and stepping stones [Limao, (2006), (2005a, 2005b), Karacaovali and Limao(2005); Tumbarello (2007)]

– political stability /peace [Martin, Mayer and Thoenig (2005); Schiff and Winters (2003)]

– human security/ rights / sovereignty [Langhammer (2007)] 

APTIAD

Status of research on RTAs

• Modeling ‐ impacts – trade flows and welfare (trade creation and trade diversion) [Mayda and Steinberg (2007); Rodrigez‐Delgado (2007); Baier and Bergstrand (2005)]

– trade liberalization (level and type of protection) [Nitsch and Sturm (2005); Foroutan (1998)]

– employment /structural adjustment /location and growth [Hallaert (2007, 2006); Vamvakidis (1998), Baldwin (2006), Dee (2006)]

– Poverty…

APTIAD

Status of research on RTAs

•Modeling ‐ methods – CGE, mostly GTAP‐ see www.gtap.org– econometric; gravity increasingly popular

APTIAD

Status of research on RTAs• Architecture‐

– With whom: [Schiff (1999):• Natural partners (in what?) • Large countries – asymmetry and competitive market access • Intra‐developing countries‐ competing exporters

– What:• FTA, EPA, CU….• Only (all) goods, or everything to make it WTO compliant• Rules of origin 

– Within what time framework: • In line with WTO timeframes

– Instrument(s) to drive liberalization

APTIAD

Any generalization based on  empirical results?

Much is driven by type of agreement (FTA vs. others)

• Not resulting in sweeping trade liberalization• More stumbling bloc then stepping stone• Do not reduce trade costs• Can drive broader cooperation• Used as negotiating tactics • Do not support “collective action” by developing countries

APTIAD

ARTNeT so far

• Sectoral approach (agriculture, banking and insurance services)

• Within sectoral approach, some GTAP quantification

• Some gravity modeling (India‐GCC and others)

APTIAD

SOME remaining questions of interest for the region

• Links between type of the agreement and its institutional background to its performance

• Optimal number of agreements/ members?• Institutional framework for implementation and sovereignty 

• Links to financial stability, FDI…• Links to growth, development and poverty 

APTIAD

Your feedback on APTIAD and other issues discussed would be welcome and 

much appreciated ‐ thank you!(for references, see paper)

[email protected]@un.orgaptiadaptiad‐‐[email protected]@un.org

mailto:[email protected]:[email protected]

Session 4: Research update on regional trade arrangements and emerging issues�Based on the paper “Mapping PTAs in Asia and theOutline of presentationIntroduction: APTIADIntroduction: ProliferationStatus of RTAs in ESCAP: factsStatus of RTAs: Bilateral optionStatus: Noodle bowl effectStatus: Multiple membershipsStatus: ‘trade-less’ agreementsStatus: ‘trade-less’ agreementsStatus: “Beyond the goods” sectoral coverageStatus of research on RTAsStatus of research on RTAsStatus of research on RTAsStatus of research on RTAsAny generalization based on empirical results?ARTNeT so farSOME remaining questions of interest for the regionYour feedback on APTIAD and other issues discussed would be welcome and much appreciated - thank you!�(for references, see pap