Harmonization of trade in services by APEC members

This study maps out the degree of services trade liberalization by the APEC members toward achieving a Free Trade Area of the Asia-Pacific (FTAAP) and makes some comparative analyses. The study finds that the commitment level differs greatly between sensitive and less sensitive sectors, and that the commitment level under the ASEAN Framework Agreement (AFAS) package 8 is the highest among the four FTAs studied. It also finds that there are cross-country and sector-wide similarities in the pattern of service sector commitment under and across each of the FTAs; this implies that the shared domestic sensitivities can be overcome by an APEC-wide economic cooperation scheme for enhancing competitiveness (through, e.g., the Trans-Pacific Strategic Economic Partnership Agreement or TPP).

Looking Toward the “New Era” Features and Background of the Japan-Thailand Economic Partnership Agreement

This paper examines Thai-Japanese relations through analysis of EPA. There are two questions. The first involves the features of JTEPA as an EPA. By scrutinizing the features of the EPA, we would like to approach the institutional framework of the “new era” which will be brought about by JTEPA. The second question is how did the governments of Thailand and Japan come to conclude JTEPA? By reviewing the focal points of the negotiations, we will describe the background of the formation and aims of JTEPA. Finally, we conclude that JTEPA is a culmination of the existing Thai-Japanese relations, and was built based upon the existing divergence of economic institutions. At the same time it upgrades the bilateral partnership to a framework for multilateral cooperation by considering assistance toward Cambodia, Laos and Myanmar and Vietnam. The author would like to emphasize that JTEPA was designed based on the idea of a further integration of CLMV and Thailand, an original member of ASEAN.

Recent trends in Asian integration and Japanese participation

In East Asia, de facto integration is taking place because Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs) are flourishing in the region. ASEAN aims to form an ASEAN Economic Community (AEC) by 2015 with the completion of the ASEAN Free Trade Area (AFTA). Surrounding countries have been competing with each other to forge FTAs or EPAs with ASEAN, including China, Japan, Korea, Australia and New Zealand, and India. As a result, ASEAN has become a trading hub in East Asia. Bilateral FTAs/EPAs are also partly in place among 16 countries (ASEAN + 6). These economic ties in trade, services and investment are accelerating this region’s development as the world’s largest production base and biggest consumption market, helping to turn around the global recession in the aftermath of the so-called Lehman Shock. However, some problems also need to be pointed out in the East Asian integration such as the spaghetti bowl effect, severe competition, labor issues, environmental destruction and power struggles.

Integration under 'One Country, Two Systems' - The Case of Mainland China and Hong Kong-

Ever since the handover of the territory in 1997, Hong Kong has had its own unique law and its own economic system and international legal personality, and has not been integrated with Mainland China. The Basic Law guarantees the uniqueness of the Hong Kong SAR until 2047. But close economic ties between Hong Kong and the Mainland will promote closer economic integration. The Basic Law limits only a customs union and the introduction of a single currency, but not the formation of a Free Trade Agreement (hereafter FTA) and monetary union. FTA has already been realized in the form of the Closer Economic Partnership Arrangement (hereafter CEPA). The Hong Kong SAR government, including the bureaucrat as well as the Chief Executive Tung Chee Hwa, was opposed to, and hesitant towards, the formation of a regional trade agreement with the Mainland, but the business community made them to adopt a positive attitude towards the CEPA. It is unclear how much integration can been deepened, but it can be argued that the current policy of the Hong Kong SAR is too supportive of business, and an excessive degree of economic integration may threaten the uniqueness of Hong Kong. But if Hong Kong achieves democracy and enjoys complete autonomy, it will be easy for economic integration to co-exist with the 'One Country, Two Systems' approach, in the interests of the business community and of the citizens of the SAR.

Gravity with multiple tariff schemes

This study contributes to the literature on gravity analysis by explicitly incorporating both most favored nation (MFN) rates and regional trade agreement (RTA) rates. Our gravity equation considers the fact that all exporters do not necessarily utilize RTA schemes, even when exporting to their RTA partners. We apply the tariff line–level data on worldwide trade to this gravity equation. As a result, we find a significantly negative coefficient for the (log) ratio of RTA rates to MFN rates. From the quantitative point of view, we show that in the first year of the Japan–Australia Economic Partnership (i.e., 2015), exports from Australia to Japan are expected to increase by 6% compared with the exports in 2014. Furthermore, it is shown that, based on the subsequent reduction in RTA rates, the magnitude of the trade-creation effect through tariff reductions gradually rises over time.

The Policy Making Process in FTA Negotiations: A Case Study of Japanese Bilateral EPAs

This paper analyzes Japanese bilateral EPA negotiations, focusing on the areas that each country decided were most important, as well as which actors played the most important roles in each set of negotiations. The negotiations with Mexico and Thailand, which tried to increase agricultural exports to Japan through FTAs, will be discussed. Japan, one should note, still seeks to protect its agricultural sector in spite of the spread of liberalization. The Philippines, Thailand and Malaysia’s efforts to improve and compete in developing their automotive industries, in the face of the completion of AFTA in 2010, are also examined. In addition, this paper discusses whether economic cooperation, the essential Japanese strategy in EPA negotiations, alters the negotiation process in any significant way.

The Japan-Peru FTA : antecedents, significance and main features

The Economic Partnership Agreement (EPA) between Japan and Peru came into effect on March 1, 2012. This paper provides background information about this agreement's significance, mostly from a Peruvian point of view. It focuses on the following subjects: the statistical trends showing Peru's declining shares in Japan's trade and investment flows with Latin American countries between the mid-1970s and mid-2000s, the main explanatory factors of such a deterioration in Peru's economic position over that period, the changes of trade policy strategy in both countries since the 2000s, and the EPA negotiation process and some of its key results as featured in the text of the agreement.

Five growth strategies for Myanmar : re-engagement with the global economy

After decades of isolation, Myanmar is now actively re-engaging with the global economy. For successful re-engagement, Myanmar needs to implement comprehensive economic reforms based on a shared vision for long-term economic development that is characterized by human-centered, high, sustainable, pro-poor, inclusive, and balanced economic growth. In this paper, we propose five growth strategies: "Agriculture Plus Plus," an export-oriented strategy, a foreign direct investment-driven strategy, a two-polar growth strategy, and a strategy to develop domestic economic corridors. These strategies are used as guides to translate these development agendas into a set of implementable policies, programs, and projects.

Is FTA/EPA effective for a developing country to attract FDI? : simulation analysis based on an extended knowledge-capital model

To prepare an answer to the question of how a developing country can attract FDI, this paper explored the factors and policies that may help bring FDI into a developing country by utilizing an extended version of the knowledge-capital model. With a special focus on the effects of FTAs/EPAs between market countries and developing countries, simulations with the model revealed the following: (1) Although FTA/EPA generally ends to increase FDI to a developing country, the possibility of improving welfare through increased demand for skilled and unskilled labor becomes higher as the size of the country declines; (2) Because the additional implementation of cost-saving policies to reduce firm-type/trade-link specific fixed costs ends to depreciate the price of skilled labor by saving its input, a developing country, which is extremely scarce in skilled labor, is better off avoiding the additional option; (3) If a country hopes to enjoy larger welfare gains with EPA, efforts to increase skilled labor in the country, such as investing in education, may be beneficial.

The Regional Development Policy of Thailand and Its Economic Cooperation with Neighboring Countries

Thailand has recently strengthened its economic policy toward its neighboring countries in coordination with domestic regional development. It is widely recognized that economic cooperation with neighboring countries is essential in preventing the inflow of illegal labor and effectively utilizing labor and resources through the relocation of production bases. This direction is strengthened by elaborating the GMS-EC and the ECS (Economic Cooperation Strategy). In addition, economic dependency of the neighboring countries on Thailand is generally high. In this report, firstly, Thai regional development policy will be made clear in relation to its economic policy toward neighboring countries as well as the status quo of the industrial estates. Secondly, Thai policy toward the neighboring countries is examined referring to the concept of wide-ranging economic zones, regional economic cooperation and special border economic zones. Thirdly, the paper will discuss how closely the economies between Thailand and the neighboring countries are related through trade and investment. Lastly, some implications on Japan's economic cooperation will also be explored.

An Economic Derivation on Trade Coefficients under the Framework of Multi-regional I-O Analysis

The gravity model, entropy model, potential type model and others like these have been adopted to formulate interregional trade coefficients under the framework of Multi-Regional I-O (MRIO) analysis. Since most of these models are based upon analogies in physics or on statistical principles, they do not provide a theoretical explanation from the view of a firm's or individual's rational and deterministic decision making. In this paper, according to the deterministic choice theory, not only is an alternative formulation of the trade coefficients presented, but also a discussion of an appropriate definition for purchasing prices indices. Since this formulation is consistent with the MRIO system, it can be employed as a useful model-building tool in multi-regional models such as the spatial CGE model.

Economic restructuring and regional distrubution of enterprises in Vietnam

The change in the ownership structure of enterprises was one of the major features of the Vietnamese economy in the 2000s. Of the three sectors of state, private and FDI, the state sector, which employed the majority of enterprise workers at the beginning of the 2000s, became the smallest by the end of the decade. One of the factors contributing to such phenomenon was SOE restructuring. Earlier SOE restructuring in the early 1990s is said to have resulted in increased economic inequality among provinces. The purpose of this paper is to clarify the impact of the SOE restructuring and related changes in the ownership structure of enterprises on the regional distribution of economic activities in the 2000s.

Measuring global value chains and regional economic integration : an international input-output approach

Firms that are expanding their cross-border activities, such as vertical specialization trade, outsourcing, and fragmentation productions, have brought dramatic changes to the global economy during the last two decades. In an attempt to understand the evolution of the interaction among countries or country groups, many trade-statistics-based indicators have been developed. However, most of these statistics focus on showing the direct trade-specific-relationship among countries, rather than considering the roles that intercountry and interindustrial production networks play in a global economy. This paper uses the concepts of trade in value added as measured by the input–output tables of OECD and IDE-JETRO to provide alternative indicators that show the evolution of regional economic integration and global value chains for more than 50 economies. In addition, this paper provides thoughts on how to evaluate comparative advantages on the basis of value added using an international input–output model.

Comparing the economic impacts of Asian integration by computational simulation analysis

The Geographical Simulation Model developed by IDE-JETRO (IDE-GSM) is a computer simulation model based on spatial economics. IDE-GSM enables us to predict the economic impacts of various trade and transport facilitation measures. Here, we mainly compare the prioritized projects of the Master Plan on ASEAN Connectivity (MPAC) and the Comprehensive Asia Development Plan (CADP). MPAC focus on specific hard or soft infrastructure projects that connect one ASEAN member state to another while the CADP emphasizes the importance of economic corridors or linkages between a large cluster and another cluster. As compared with MPAC projects, the simulation analysis shows that CADP projects have much larger positive impacts on ASEAN countries.