Best practices for regional trade agreements

Park, Innwon; Park, Soonchan

doi:10.1007/s10290-010-0081-7

Cited by 10 publications

(3 citation statements)

References 24 publications

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“…Considering the effect on welfare and real GDP, Park (2009) argues that the expansionary ASEAN+3 RTA is the best strategy for East Asian participants and the world economy in terms of creating bigger gains in many aspects and more evenly distributed gains between the Southeast and Northeast Asian members. 14 See Park and Park (2011a).…”

Section: Discussionmentioning

confidence: 99%

Is AFTA a Desirable Regional Trade Agreement for ASEAN?

Park¹

2011

International Area Studies Review

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This study evaluates the effectiveness of the Association of Southeast Asian Nation (ASEAN) in liberalizing trade and investment through regional economic cooperation. We test whether the ASEAN Free Trade Area (AFTA) satisfies necessary conditions for a trade bloc to generate a positive and sufficient net trade creation effect by calculating trade-related indices introduced by the theory of economic integration. We find that ASEAN economies might not satisfy most of the conditions for creating positive welfare gains from AFTA. Moreover, in order to search for a desirable regional trade agreement (RTA) in the East Asian region, this study considers alternative strategies beyond AFTA, such as the currently implemented ASEAN hub (three sets of ASEAN+1: ASEAN+China, ASEAN+Japan, and ASEAN+Korea) RTA and a proposed ASEAN+3 (including ASEAN, China, Japan, and Korea) RTA. Although the ASEAN hub RTA appears to be a better policy option for ASEAN, it is not necessarily desirable for the region when we consider the neighboring countries in Northeast Asia as spokes. Therefore, we propose that the ASEAN+3 RTA, covering 10 ASEAN member countries and the three Northeast Asian countries, is a more desirable RTA in East Asia.

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Section: Discussionmentioning

confidence: 99%

Is AFTA a Desirable Regional Trade Agreement for ASEAN?

Park¹

2011

International Area Studies Review

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“…With no cumulation, Augier et al estimated that trade has been 50% less than expected with the impact most notable for trade in intermediate goods. Further panel estimates by Park and Park (2011) for bilateral trade of 154 countries over 1980-2005 capturing all regional trade agreements (RTAs) reported to the WTO suggested a statistically significant positive association (trade-creation effect) of the intensity of bilateral trade among RTA members and a statistically negative correlation (tradediversion effect) on the intensity of bilateral trade between RTA members and outsiders. Their results show the strongest trade-creation effect for full cumulation, followed by diagonal cumulation, and an insignificant trade-creation effect for bilateral cumulation.…”

Section: Choice Of Rulesmentioning

confidence: 99%

A Primer on Rules of Origin as Non-Tariff Barriers

Kniahin¹,

Melo²

2022

JRFM

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An explosion of different preferential rules of origin (PROO) has accompanied the spread of preferential trade agreements (PTAs) around the world. Complying with PROO requirements entail costs for producers, exporters, and customs officials. Observers, firms, customs officials, and policymakers have advocated simplification as well as harmonization. The paper surveys the literature drawing on the extensive database in ITC’s Rules of Origin Facilitator (ROF) database covering 54,000 distinct PROO spread across 370 PTAs to illustrate the issues covered in the literature. We review what we know about the compliance costs associated with PROO requirements. We illustrate these costs graphically and summarize through mathematical decomposition of compliance costs along two dimensions: distortionary costs resulting from the restrictiveness of PROOs and administrative costs. We survey the existing evidence in literature by themes: (i) determinants of the utilisation of preferences; (ii) effects on third countries outside the PTA; (iii) choice of rule; (iv) preference margin and complexity of rules; (v) trade deflection; and (vi) firm-level evidence. In conclusion, drawing lessons from the empirical literature is a complicated exercise because preference uptake, an important indicator of compliance costs, is only available for a handful of PTAs at the disaggregated product level.

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“…the five ASEAN+1 RTAs to the RCEP, the RCEP and TPP to the FTAAP) could result in difficulty in harmonizing the ROO. Park and Park (2011) propose the cumulation of the ROO as a means of enhancing global free trade by mitigating these negative effects. Kim, Park, and Park (2013b) recommend that regime-wide ROO such as diagonal cumulation, de minimis, and self-certification requirements should be applied to reduce the additional administrative and compliance costs of verifying restrictive ROO.…”

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Regional Trade Agreements in East Asia: Past and Future

Park

2019

Development Policy Review

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Motivation Proliferating regional trade agreements (RTAs) in East Asia since the region’s financial crisis in 1997 have been hotly debated. To date, however, no research has comprehensively examined the desirability of East Asian RTAs based on such factors as membership and evolutionary paths. Purpose We assess, retrospectively and prospectively, East Asian countries’ efforts to liberalize the regional market through co‐operation. We investigate (i) why RTAs have proliferated in East Asia; (ii) the main characteristics of East Asian RTAs; (iii) whether East Asian countries are desirable trading partners for one another; and (iv) the prospects of East Asian RTAs. Approach and methods We conduct a qualitative analysis on the desirability of East Asian partnership and examine quantitative studies of the likely impacts of East Asian RTAs on members, non‐members, and the global economy. Findings We verify that East Asian neighbours are appropriate trading partners for the formation of RTAs. Policy implications We recommend that East Asian RTAs should follow an expansionary path such as the five ASEAN+1 RTAs to the Regional Comprehensive Economic Partnership (RCEP) to the Free Trade Area of the Asia‐Pacific (FTAAP). Moreover, the region must co‐operate with major external trading partners by forming cross‐regional RTAs with the European Union (EU) and United States (US). Two priority changes must also be implemented: the harmonization or simplification of the rules of origin and cumulation of value contents among East Asian RTA members.

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Best practices for regional trade agreements

Abstract: Regional trade agreements, Rules of origin, Gravity, GATT Article XXIV, Enabling Clause, C23, F13, F15,

Cited by 10 publications

References 24 publications

Is AFTA a Desirable Regional Trade Agreement for ASEAN?

Is AFTA a Desirable Regional Trade Agreement for ASEAN?

A Primer on Rules of Origin as Non-Tariff Barriers

Regional Trade Agreements in East Asia: Past and Future

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