2.1. The East Asian Noodle Bowl3
Figure 1 makes the point graphically. The figure shows each FTA that has been or is near to being signed. Specifically, by the end of 2005, the region had signed what amounts to 57 FTAs. The ASEAN-PRC FTA (ACFTA) is counted as 10 separate deals due to ASEAN’s rather unique method of preferential liberalization. The reality is extremely complex, but roughly speaking, PRC and each ASEAN country chooses its own “sensitive list” and bilateral market access depends upon the interaction of the two lists. Nations do not get preferences for items on their own list and are not granted preferences for items on the counter party's list. All bilateral links inside the ASEAN FTA (AFTA) are listed separately for the same reason. The fractured nature of ASEAN’s basic approach to preferential trade implies that the degree of market access faced by an AFTA exporter of any particular product varies according to the ASEAN destination- market concerned. For example, we cannot view the Malaysia-Indonesia preferential tariff structure as identical, or even close to the Singapore-Philippines preferential tariff structure. Thus AFTA acts as if it were 45 bilateral trade relationships (10 times 9 divided by 2). Fortunately, the existence of ASEAN implies that 55 bilateral are not completely dissimilar—ASEAN has imposed some discipline on rules of origin, product exclusion practices and phase-in modalities. Finally, Japan has signed FTAs with Malaysia and Singapore with these being de jure as well as de facto separate agreements. See Whalley and Banda (2005) for a detailed assessment of ASEAN’s trade deals.
By the end of 2006, however, it seemed likely that the region would have at least 13 more deals—10 de facto bilaterals from the impending ASEAN-Korea FTA, and 3 more bilaterals between Japan and the advanced ASEANs—Indonesia, Philippines, and Thailand. That brings the total to 70. Japan may also conclude FTAs with Viet Nam and Brunei Darussalam and ASEAN as a whole, bringing the total to at least 75. Of course, a reasonable person could count these differently and come up with a different number, only serving to strengthen the basic point: in the Noodle Bowl, it is unclear just how many deals there are in the region.
How did East Asian trade relations get so tangled?
2.1. The East Asian Noodle Bowl3Figure 1 makes the point graphically. The figure shows each FTA that has been or is near to being signed. Specifically, by the end of 2005, the region had signed what amounts to 57 FTAs. The ASEAN-PRC FTA (ACFTA) is counted as 10 separate deals due to ASEAN’s rather unique method of preferential liberalization. The reality is extremely complex, but roughly speaking, PRC and each ASEAN country chooses its own “sensitive list” and bilateral market access depends upon the interaction of the two lists. Nations do not get preferences for items on their own list and are not granted preferences for items on the counter party's list. All bilateral links inside the ASEAN FTA (AFTA) are listed separately for the same reason. The fractured nature of ASEAN’s basic approach to preferential trade implies that the degree of market access faced by an AFTA exporter of any particular product varies according to the ASEAN destination- market concerned. For example, we cannot view the Malaysia-Indonesia preferential tariff structure as identical, or even close to the Singapore-Philippines preferential tariff structure. Thus AFTA acts as if it were 45 bilateral trade relationships (10 times 9 divided by 2). Fortunately, the existence of ASEAN implies that 55 bilateral are not completely dissimilar—ASEAN has imposed some discipline on rules of origin, product exclusion practices and phase-in modalities. Finally, Japan has signed FTAs with Malaysia and Singapore with these being de jure as well as de facto separate agreements. See Whalley and Banda (2005) for a detailed assessment of ASEAN’s trade deals.By the end of 2006, however, it seemed likely that the region would have at least 13 more deals—10 de facto bilaterals from the impending ASEAN-Korea FTA, and 3 more bilaterals between Japan and the advanced ASEANs—Indonesia, Philippines, and Thailand. That brings the total to 70. Japan may also conclude FTAs with Viet Nam and Brunei Darussalam and ASEAN as a whole, bringing the total to at least 75. Of course, a reasonable person could count these differently and come up with a different number, only serving to strengthen the basic point: in the Noodle Bowl, it is unclear just how many deals there are in the region.How did East Asian trade relations get so tangled?
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