Asia’s Free Trade Agreements

Asia’s Free Trade Agreements

How is Business Responding?

ADBI series on Asian Economic Integration and Cooperation

Edited by Masahiro Kawai and Ganeshan Wignaraja

The spread of Asia’s free trade agreements (FTAs) has sparked an important debate on the impact of such agreements on business activity. This pioneering study uses new evidence from surveys of East Asian exporters – including Japan, the People’s Republic of China, the Republic of Korea and three ASEAN economies of the Philippines, Singapore and Thailand – to shed light on the FTA debate.

Chapter 1: Introduction

Masahiro Kawai and Ganeshan Wignaraja

Subjects: asian studies, asian business, asian economics, business and management, asia business, international business, economics and finance, asian economics, international economics


Masahiro Kawai and Ganeshan Wignaraja CONTEXT AND PURPOSE OF THE STUDY Economically important East Asia is at the forefront of world free trade agreement (FTA) activity. Policymakers, economists and businesspeople are concerned about the business impact of these proliferating agreements.1 This book reports the results of an evidence-based study on the business impact of the Asian ‘noodle bowl’ of multiple and overlapping FTAs in six East Asian2 countries: Japan, the People’s Republic of China (PRC), the Republic of Korea (hereinafter Korea), Singapore, Thailand and the Philippines. The six countries represent a mix of development levels and FTA experiences and highlight lessons for latecomers to FTAs. The three largest Northeast Asian economies are driving the spread of FTAs in East Asia while the three smaller Association of Southeast Asian Nations (ASEAN) economies are increasingly turning to FTAs as a major instrument of trade policy. In a novel methodological approach, the study used firm surveys to explore the business implications of FTAs and the noodle bowl in East Asia. Due to the paucity of official statistics, firm surveys are indeed almost the only means of collecting information on issues like the use and impediments to use of FTAs. This multicountry, multifirm study is the first comprehensive survey of East Asian firms and has generated the largest dataset (841 manufacturing export firms) of its kind for empirical analysis. The dataset captures the behaviour of major industries – including electronics, automotive, textile and garment, and food – that have driven export success in East Asian economies....