Are Regional Trade Agreements in Asia Stumbling or Building Blocks? Implications for the Mekong-3 Countries
IMF Working Papers, March 1, 2007
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Bibliographic details
- Authors: Patrizia Tumbarello
- Published: March 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866179.001
Summary
- Research question: Is the recent proliferation of Regional Trade Agreements (RTAs) in Asia a healthy development, or does it risk becoming an unmanageable "noodle bowl"?
- Main conclusion: Membership in the Asian RTAs considered in this study has not, to date, occurred at the expense of trade with nonmembers, because most Asian countries' integration with the global economy preceded regional integration.
- Forward-looking risk: Given their discriminatory nature, a proliferation of RTAs that is not accompanied by continuing unilateral and multilateral liberalization could run the risk of leading to costly trade diversion.
Key findings and implications
- RTA membership to date: No observable trade loss with nonmembers attributable to RTA membership in the sample examined.
- Sequencing of integration: Global integration generally preceded regional integration for most Asian countries in the study.
- Policy risk: Proliferation of discriminatory RTAs, absent continued unilateral and multilateral liberalization, could cause trade diversion and associated costs.
Policy recommendations / Considerations
- Continue unilateral and multilateral liberalization to mitigate the discriminatory risks of an expanding web of RTAs.
- Monitor the cumulative effects of overlapping RTAs to prevent inefficient trade diversion outcomes.
Subjects and keywords
- Subjects: Customs unions, Imports, Trade agreements, Trade balance, Trade liberalization
- Keywords: ASEAN member, right, WP