The Asian Perspective
- ADBI series on Asian Economic Integration and Cooperation
Edited by Masahiro Kawai, Peter J. Morgan and Pradumna B. Rana
Chapter 7: Evolving trade policy architecture and FTAs in Asia
Asia’s trade policy architecture is witnessing a proliferation of free trade agreements (FTAs) with significant implications for economies and firms alike. This marks a break with past trade policy in the region. Asia’s famous economic rise as the “global factory” over several decades was facilitated by outward-oriented development strategies and a multilateral approach based initially on the General Agreement on Tariffs and Trade (GATT) and then its successor, the World Trade Organization (WTO). Free trade agreements (FTAs), as trade-policy instruments in Asia, were largely absent in the region’s trade policy architecture during Asia’s economic rise. Today, the region is a leader in global FTA activity with about 76 concluded FTAs in 2013 (up from only 3 in 2000). Its largest economies (People’s Republic of China [PRC], India and Japan) as well as a few advanced ASEAN economies (e.g. Singapore and Thailand) have become key players in FTA activity (see Appendix Table 7A.1). Reflecting the growth of FTAs, the importance of FTAs to Asia’s trade has also increased. Several reasons seem to underlie the spread in Asian FTAs, including market access for goods trade, the need to remove impediments to deepening regional production networks and supply chains, the intensification of FTA activity in Europe and the Americas, and slow progress in WTO Doha Round trade talks.
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