The Multiple Challenges in Asian FTAs IDEAs-GSEI-ITD Asian Regional Workshop on FTAs: Towards inclusive trade policies in post-crisis Asia 8-9 December.

The Multiple Challenges

in Asian FTAs

IDEAs-GSEI-ITDAsian Regional Workshop on FTAs: Towards inclusive trade policies in post-crisis Asia8-9 December 2009Bangkok

Dr. Mia MikicTrade Policy SectionTrade and Investment Division

Presentation Outline

Regionalism in Asia-PacificStatus

Main characteristics

ConcernsNational level

Regional level

Management of ‘noodle bowl”

Status of Regionalism in Asia-PacificStatus of Regionalism in Asia-Pacific

Singapore

Sri Sri LankaLanka

Bangladesh

IndiaRep. of KoreaLao

PDR

Thailand

Australia

Papua New

Guinea

Source: APTIAD, April 2008,

Bangkok Agreement

ASEAN

1977

Philippines

PATCRA

Malaysia

Indonesia

Bhutan

Sri Sri LankaLanka

Maldives

Bangladesh

IndiaChina

New Zealand

Brunei Darussala

m

CambodiaIndonesi

a

Lao PDR

Myanmar

Philippines

Viet Nam

Nepal

Marshall Is. Micronesia

Palau

Tuvalu

Cook Is. Fiji Kiribati

Nauru Niue

Samoa Tonga

VanuatuSolomon

Is.

Australia

Singapore

Papua New

Guinea

USA

Chile

Japan

Hong Kong, China

Iran, Is. Rep.

Jordan

Bahrain

EU

Turkey

Afghanistan

© APTIAD, June 2009,

not all PTAs shown

Niger

GCC

MexicoPanama

Peru

Qatar

Canada

Georgia

Kyrgyzstan

Armenia

Kazakhstan

Ukraine

AzerbaijanTurkmenistan

Uzbekistan

Tajikistan

CISFTA

SAFTA

BIMSTEC

APTA

AFTA

EFTA

PICTA

SPARTECA

MSG

EurAsEC

NAFTA

MERCOSURSACU

Pakistan

Thailand

Malaysia

2009 ECOTA

Korea,

Rep.of.

Macao, China

Russian

Fed.BelarusMoldova

RTAs explosion in Asia-Pacific

Asia-Pacific

0

2

4

6

8

10

12

14

16

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

PT

As

per

yea

r

0

20

40

60

80

100

120

140

Cu

mu

lati

ve

PTAs

Under Negotiation

Cumulative

Interest of countries in Asia-Pacific to negotiate had one peak in mid 1990s and then started to rise exponentially after 2002

…increase in number of RTA in Asia-Pacific is in line with the global trend

Characteristics of RTAs in Asia-PacificCharacteristics of RTAs in Asia-Pacific

Architecture of Asia-Pacific RTAs

Notes: * “FTA & EIA” stands for Free Trade Agreement and Economic Integration Agreement- a category of agreements that are notified both under goods and services; * * includes six agreements between Central Asian countries and members of CIS not in ESCAP Source: Compiled from APTIAD, August 2009

Number and make up of memberships:

• Only one Asian WTO Member (Mongolia) has no RTAs (as yet!)

•Asia-Pacific non-WTO members: from 1 to 11 RTAs

• Average per ESCAP 6 RTAs in implementation per economy, minimum=0 RTA, maximum= 22 RTA

•Often partners from outside the region

RTA NTMs Investment

Services Competition

IPR TF

ASEAN-Australia-New Zealand FTA (AANZFTA)

-***

ANZCERTA1 * - Separate

Separate

- Separate

APTA2 - In progress In progress - - In progress

ASEAN (AFTA)2 Separate

Separate

ASEAN-China PTA2 -** -** Separate

- -*** -

BIMSTEC-FTA -** -** -** - - -**

India-Singapore BTA1 -***

PICTA - - - -***

SAFTA - -** - -** - -**

TRANS-PACIFIC SEP1 In progress

COVERAGE of areas

Difference between RTAs in terms of coverage:

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Competition Environment Investment Tradefacilitiation

Services IPR Procurement

% o

f ag

reem

ents

BTA RTA C-BSingapore issues

bilateral and country-bloc cover more sectors

NBTA=66NRTA=11NC-B=14

Volume of trade covered

As shares of exports to PTA partners in total country’s exports

Concerns - at national levels:

Disconnect in pursuit of trade liberalization through multilateral trade system and RTAs:

Policy space (investment, competition, services, IPRs, etc) Market access BUT restrictive Rules of Origin

Weak institutional dimensions- Consultative processes during negotiations- Monitoring and evaluation of implementation (no

appropriate bodies – joint committees but not always functioning well)

Other concerns

Trade in Asia-Pacific has been more market-driven (growth-driven?) than PTA-driven: sustainability?Forging agreements with partners outside the region kept Asia as a relatively open bloc: helping global economy?RTAs in Asia not “economic integration”: weak regional institutions and lack of incentives for convergence?Given changes in global economy, is there a need / possibility for stronger regional trade governance / integration?

Managing the “noodle bowl”Managing the “noodle bowl”

Towards multilateralization of RTAs?

Global – WTO and rules for ensuring that RTAs are “building blocks”Regional – consolidation /enlargement of RTAs:

impact on members vis-à-vis non-members sectoral impacts

National – inclusive decision making for growth with more balanced effects (“Trade needs to be governed to produce benefits to all.” )

Features of the ‘model’ FTA taking into account rules and needs of developing countries

GOODS SERVICES OTHERS

trade in goods, including trade remedies (safeguards, anti-dumping measures and countervailing duties)

customs procedures rules of origin technical barriers to trade sanitary and

phytosanitary measures

trade in services, and in particular:

o trade in financial serviceso trade in

telecommunications services

commercial presence movement of natural

persons

intellectual property competition policy government procurement trade facilitation investment

electronic commerce

transparent administration of laws and regulations consultations and dispute settlement and legal and institutional issues

Thank you!http://www.unescap.org/tid/aptiad

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