“new Regionalism” In Asia: A Comparative Analysis Of Emerging Regional And Bilateral Trading Agreements Involving Asean, China And India

“NEW REGIONALISM” IN ASIA: A COMPARATIVE ANALYSIS OF EMERGING REGIONAL AND BILATERAL TRADING AGREEMENTS INVOLVING ASEAN, CHINA AND INDIA Rahul Sen

WHAT’S “NEW REGIONALISM”?

Resemblance of ongoing phenomenon of proliferation of bilateral and regional trading agreements in the Asia-Pacific, especially in the aftermath of the regional financial crisis.

INTRODUCTION 

Rapid proliferation of wave of “new regionalism” among Asian economies over the past decade



More diverse in scope and coverage than traditional Free Trade Agreements (FTAs)



Phenomenal proliferation of bilateralism due to:  Slow

pace of progress of multilateral trades negotiations in WTO  Bilateral trade serves key diplomatic and security ends

INTRODUCTION 

Agreements aimed at ‘deeper integration’ among trading partners – termed as Economic Partnership Agreements (EPAs)



“Stumbling block” vs “building block”



Applying models of modern trade theory and similar modelling techniques to understand the phenomenon and its implications is challenging

OBJECTIVE OF PAPER 

Provides a comparative analysis of the ongoing bilateral and regional initiatives involving ASEAN, China and India



Attempts to analyse the similarities and differences among ASEAN, China and India with respect to the negotiating framework, coverage of issues and depth of its commitments

KEY FINDINGS 

Concerns from new regionalism  Discriminatory  Potential

against non-members

trade diversion

 Inefficient

utilisation of scarce resources that could be devoted towards multilateral negotiations in WTO

 Applicability

and consistency in negotiating framework of overlapping member countries

KEY FINDINGS 

Perceived benefits from new regionalism  Act

as catalyst in enhancing the pace of multilateral trade liberalisation

 Facilitate

government to initiate domestic economic reforms

 Member

countries are committed to maintaining peace and stability amongst themselves

KEY FINDINGS 

Trade in Goods  Exclusion

of few products from tariff reductions is insignificant

 Non-tariff

barriers are progressively reduced and can only impose those permitted under the WTO

 Rules

of Origins (RoOs) differ across different FTAs that could increase compliance costs for adhering to these RoOs

 Application

of RTA safeguard measures as part of FTA

KEY FINDINGS 

Trade in Goods  Adhering

to WTO principles on trade remedies for most RTAs

 Timelines

for negotiations and implementation vary significantly across BTAs



Trade Facilitation  Facilitation

of trade flows through closer customs cooperation and mutual recognition of standards and conformity assessment

KEY FINDINGS 

Trade in Services  Allow

foreign service providers to supply service to it’s RTAs partner

 Enhance

cooperation in services to improve efficiency and competitiveness

 Diversify

the supply and distribution of supply

 Mutual

recognition of qualification, certification and licensing requirements

 E.g.

Singapore’s enforced RTAs with US and Australia

KEY FINDINGS 

Mutual recognition of qualification & licensing requirements 



e.g. S’pore’s enforced RTA with USA has provisions for recognising degrees from certain US Law Schools that would allow their graduates to practise in S’pore

Temporary Movement of Natural Person  Stay



in partner countries extended

Government Procurement  Private

business in one country to sell goods and services to governments to their RTAs partners

KEY FINDINGS 

Investments 

BTA objective is to create a liberal, facilitative, transparent & competitive investment regime



BTA investment negotiations focuses on: 1. Issues of market access 2. Treatment of foreign investments 3. Repatriation of profits 4. Expropriation & compensation 5. Investor protection 6. Harmonisation of business laws

KEY FINDINGS 

Intellectual Property Protection  Relevant

for countries with a huge emphasis on innovation and R&D in InfoComm Technology  Should respect copyright rules & patent protection to maintain a competitive advantage  E.g.

S’pore – USSFTA prevents piracy of copyrighted works over the Internet, criminalizing unauthorized reception & distribution of satellite signals & allowing all inventions to be patented

KEY FINDINGS 

Competition Policy  Prohibits

anti-competitive business practices to provide a level playing field for foreign investors  Exchange of info reagrding any prevailing anticompetitive practices  Periodic review of progress of competition policies are conducted  E.g.. S’pore – USSFTA states that Govt Linked Companies (GLC) will be commerically run & the S’pore govt will not interfere with commercial decisions of GLCs (such as SingTel, SIA).

KEY FINDINGS 

Dispute Resolution Mechanism  Provision

for quick and efficient resolution of trade disputes in all agreements

 Private

sector allowed a limited role to invoke dispute under investor-state dispute settlement in Singapore’s BTAs and TAFTA

 Enforcement

is crucial for businesses to minimize risks from using such mechanism for bilateral dispute resolution

KEY FINDINGS 

Broader Areas of Economic Cooperation  Strengthening

bilateral economic cooperation in a diverse range of areas

 Commitment

towards developing longer-term cooperative relationship, enhancing trust and confidence in each other

 Significant

for long-term strategic and socio-economic relations among member countries

 Basis

for deeper economic integration

KEY FINDINGS 

Convergence or Divergence?  Exhibit

wide differences in scope and coverage of trade liberalisation

 Minimal

degree of commonality is observed in some of the broad issues covered in the RTAs/BTAs

 Unlikely

for ASEAN to undertake common negotiating positions

 Member

countries undertake important domestic and external sector reforms, but unlikely to be welfare enhancing in their own end unless concomitant unilateral liberalisation is also pursued

CONCLUSION 

Increasing recognition among Asian policy-makers that greater economic coordination and cooperation is essential to manager globalisation challenges and to enhance its role in world affairs



Multilateralism is indispensable to a well-ordered, open and rational international trading system, and cannot be ignored at the expense of bilateralism to pursue global free trade



Pursual of unilateral liberalisation would be essential for developing countries to gainfully benefit from trade liberalisation at the bilateral and multilateral level