Chapter 15: Regionalism, Trade and Economic Development in the Asia-Pacific Region: Challenges Ahead
15. Regionalism, trade and economic development in the Asia-Paciﬁc region: challenges ahead M.A.B. Siddique INTRODUCTION Regional trade agreements (RTAs) are established with the main objective of increasing the ﬂow of total trade by eliminating trade barriers between the signatory countries. These agreements are expected to bring these countries one step closer to globalization as trade barriers are reduced. However, RTAs may lead to trade friction as increased trade ﬂows between the member economies of a regional bloc (trade creation) may take place at the expense of the non-member economies (trade diversion). There are two main facets of RTAs: bilateral and multilateral. The advancement of RTAs in the Asia-Paciﬁc region has gained momentum in recent years. Singapore and Japan signed an Economic Partnership Agreement in 2002. Australia established two Free Trade Agreements (FTAs) during 2003: the Singapore–Australia Free Trade Agreement (SAFTA) and the Thailand–Australia Free Trade Agreement (TAFTA), in addition to the Closer Economic Relations established with New Zealand (ANZCERTA), in force since 1998. Australia also concluded a Free Trade Agreement with the USA (AUSFTA) on 8 February 2004. Negotiations were also completed between the ASEAN 10 (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and China, with the ASEAN–China Free Trade Area coming into force on 1 January 2005. The United States has, on the other hand, signed nine RTAs: two with the countries included in North American Free Trade Agreement (Canada and Mexico), and seven more with Australia, Chile, Israel,...
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