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Several initiatives have emerged for regional economic integration in the Asia-Pacific region. The United States has led the negotiations for the Trans-Pacific Partnership agreement, and ASEAN countries have recently started to promote the Regional Comprehensive Economic Partnership. This paper estimates the net economic impact of these initiatives by eliminating the overlapping portions of free trade agreement--related economic gains through the use of a dynamic computable general equilibrium model. The paper analyzes the economic and political feasibility of these two initiatives and assesses their economic impacts. Finally, the paper provides implications for economic integration in East Asia based on a quantitative assessment. [ABSTRACT FROM AUTHOR]

This paper investigates the trade restrictiveness of product-specific rules of origin (PSRs) in the comprehensive sets of free trade agreements (FTAs) for Japan and the United States, focusing on their similarities and dissimilarities. The most distinctive dissimilarities are the major PSR types and their variation among FTAs. Japan's FTAs use the selective type ("change in tariff classification [CTC] or regional value content [RVC]") most intensively. In contrast, a few U.S. FTAs use RVC and others use CTC most intensively, and the distribution of simplified PSR types appears to be almost the same among FTAs in each group. The detailed PSR types, however, are likely to be more heterogeneous and complicated in U.S. FTAs than in Japan's FTAs. Such dissimilar features are more salient in machinery sectors with dense global value chains (GVCs)/international production networks (IPNs). The quantitative estimates suggest that the selective types utilized by Japan for most machinery products are much less trade-restrictive, while certain complicated types adopted by the United States for many machinery products are substantially trade-restrictive. Our detailed investigation revealed the two countries' contrasting strategies, namely, Japan appears to aggressively utilize FTAs with less restrictive PSRs to enhance GVCs/IPNs, while the United States tends to make PSRs more restrictive and complicated in detail as a sort of disguised protection tool. [ABSTRACT FROM AUTHOR]

A review of the article "Heterogeneous Impacts of Free Trade Agreements: The Case of Japan" is presented.

The author comments on an article about the quantitative effects of free trade agreements (FTAs) and Customs Unions (CUs) for economic integration platforms in Asia. He believes that a CU is more efficient than an FTA. He questions the conclusion that Japan should focus on advanced manufacturing, while Korea should focus on light manufacturing. He considers the reduction of tariffs in each sector.

The spaghetti bowl phenomenon expected from the proliferating East Asian regional trade agreements (RTAs) is worrisome. In particular, the complicated web of hub-and-spoke type of overlapping free trade agreements (FTAs) can result in high costs for verifying rules of origin. As an alternative policy option to avoid the negative effect of trade deflection, customs unions (CUs) should be examined. Most of the theoretical analyses on the formation of CUs highlight stronger positive welfare effects compared to FTAs. However, there is a lack of empirical evidence to support the second-best theory of customs unions. This paper is an attempt to fill this gap by applying two methodologies: an ex ante simulation approach and an ex-post econometric approach. We quantitatively estimate the trade effect of CUs and FTAs by adopting a Gravity regression analysis. In general, we find that a CU is a superior type of RTA to an FTA in terms of creating more intra-bloc trade. In addition to analyzing the trade effects of RTAs according to type, we quantitatively evaluate the welfare and output effects of CUs for East Asia (an ASEAN+3 CU and a China-Japan-Korea CU) compared to FTAs by applying a computable general equilibrium model analysis. The East Asian CUs adopt a system of common external tariffs (CET) based on simple-averaged, import-weighted, consumption-weighted, and minimum rates. Overall, we find that the ASEAN+3 CU with the minimum CET are the most desirable type of RTA for both East Asian member countries and the world economy as a whole. [ABSTRACT FROM AUTHOR]

Comments on the article "South Korea's Marginal Intra-Industry Trade (MIIT) and the Choice of Preferential Partners," by Hyun-Hoon Lee and Chan-Hyun Sohn. Lack of general determinants of MIIT and intra-industry trade across countries; Lapses in the linkage between the formation of free trade agreements and the degree of intra-industry trade; Argument of Eisuke Sakakibara regarding the influence of foreign direct investment in intra-industry adjustments.

The article presents the author's insights on the impact of trade liberalization on exportation of environmental and energy goods and services in Asia. Topics discussed include the issue of environmentally friendly of developing countries that export energy and environmental services and goods, the relation of home country, foreign country, and natural factors of export growth with institutions and infrastructure, and the mutual interest on foreign direct investment and trade agreement.

B Tat Wai Tan, Sunway University: b This paper touches on the important issue of how the U.S.-China trade war will impact on Taiwan's economy.[1] It is important not just for Taiwan, but also a reflection for other economies that have increasingly benefited from their association with the high growth economy of China and the supply chain engulfing them. There is a major difference between Taiwan being part of China's supply chain and both China and Taiwan being part of American companies' supply chain. The product owners can decide to reduce purchases from China but maintain purchases of parts from Taiwan but channel them to new centers, and Taiwan may not lose even if China were to lose. This has nothing to do with Taiwan's export to China, unless the export of LCD panels was so big it is cheaper to supply within China - in which case the relationship should be a positive one, rather than a negative one. [Extracted from the article]

South Korea recently signed a free trade agreement (FTA) with Chile and is currently negotiating or studying bilateral FTAs with about 20 countries. However, some South Koreans oppose such agreements because they fear that trade liberalization would result in costly factor adjustment. Many researchers believe that intra-industry trade expansion generates smaller inter-industry factor adjustment (and therefore lower costs) compared with the costs associated with inter-industry trade expansion. This paper analyzes the extent and nature of intra-industry trade and marginal intra-industry trade in South Korea, to help predict the relative costs it might face upon opening its markets to various countries. [ABSTRACT FROM AUTHOR]

The author in this article analyzes a paper which discussed the subject of trade liberalization over product categories in free trade agreements (FTA) particularly in Japan, China and Korea. He also cited empirical results from two indexes used by the author of the paper, namely the index of sensitivity (ISD) and the index of dispersion power (IDP). The author believes that the empirical results presented by the paper could be more supported with further discussion of the effects of these results and policy interpretations.

Over recent decades ASEAN has advanced a policy of regional integration, starting with the ASEAN Free Trade Area, following on with the ASEAN+1 free trade agreements with its six main trading partners, and now with ASEAN+6. To further advance ASEAN's regional integration in the East Asian context, it should continue to focus on further liberalization of trade in goods, investment, and services that can facilitate more trade and investment. East Asian integration is designed not to be just an "extensive regional trade agreement," but is more a "responsive vehicle" that consists of trade and investment commitments combined with facilitation. To keep regional integration viable, it should adopt an open regionalism. [ABSTRACT FROM AUTHOR]

The author comments on the paper "Markets Matter: The Potential of Intra-Regional Trade in ASEAN and Its Implications for Asian Regionalism" by Lurong Chen, Philippe De Lombaerde and Ludo Cuyvers. She assesses the potential to further develop intra-regional trade in ASEAN. She also discusses the potential of ASEAN to export more to the regional market and the importance of the Regional Comprehensive Economic Partnership (RCEP) to ASEAN.

East Asia is catching up with the rest of the world in establishing regional trade arrangements (RTAs). This region is responding to pressures from globalization, regionalism in the Americas and Europe, the rise of China and India, improved political relations in the region with the end of the Cold War, as well as market-driven trade and investment integration and the emergence of production networks. ASEAN formed the first RTA in 1992, and by the turn of the decade, ASEAN was signing or negotiating free trade agreements (FTAs) with Japan, China, South Korea, India, Australia-New Zealand, and the European Union. It also entered into bilateral FTAs with the United States and countries in Latin America, Africa, the Middle East, and South Asia. ASEAN is also considering an East Asian FTA. Can ASEAN remain in the driver's seat of regional integration and be an effective hub? The FTA proliferation also has important consequences and effects for East Asia and the world trading system. [ABSTRACT FROM AUTHOR]

The author addresses the lack of economic integration in Northeast Asia. He describes the economic performance of Northeast Asia over the last half century. He believes the lack of economic integration in the region is caused by lack of political commitment and will. He considers the negative impact of bilateral free trade agreements on the regional integration in Northeast Asia.

The article discusses the article "Emerging Mega-FTAs: Rationale, Challenges, and Implications" by Siow Yue Chia, which appeared within the issue. Topics mentioned include three important issues the Korean government needs to consider in deciding on whether or not to join the Trans-Pacific Partnership (TPP) and when, the impact of increasing trade integration on the world business cycle, and the existing tradeoff between global stability and trade blocs.

We investigate the effects of free trade agreements (FTAs), focusing on the impact of cumulative rules of origin (ROO) on trade costs. Using a gravity regression model, we estimate the effect of various cumulative ROO systems on the measured trade costs. We apply these estimates to static and capital accumulation computable general equilibrium models to compare the effects of mega-regional FTAs in the Asia-Pacific region—namely, the Regional Comprehensive Economic Partnership (RCEP), Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and Free Trade Areas in the Asia-Pacific (FTAAP). We find that mega-regional FTAs may not be a viable alternative to a multilateral trading system or bilateral FTAs unless less restrictive cumulative ROO are adopted. Successful FTAs depend on an appropriate cumulative ROO provision system rather than their membership expansion. [ABSTRACT FROM AUTHOR]

Figure 1 shows the recent crude oil imports (HS code starting with 2709) of Korea and Japan and the United States' share of total crude oil imports. Crude oil imports of Korea and Japan India's crude oil imports are larger than those of Korea and Japan; hence, India can utilize the leverage in negotiating trade disputes with the United States. Crude oil imports of India Notes Footnotes 1 I Nikkei Asian Review i (20 September 2019), "India's Modi visit to U.S. will focus on securing oil and gas", https://asia.nikkei.com/Politics/International-relations/India-s-Modi-visit-to-US-will-focus-on-securing-oil-and-gas. [Extracted from the article]