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In regional trade agreements (RTAs), member countries choose a common rule of origin (RoO) for each product. This study examines the factors that influence RoOs in four ASEAN‐plus‐one RTAs, which are agreements between ASEAN and four individual countries. One unique feature is that ASEAN as a whole negotiates with a plus‐one country, which may dilute the interests of individual ASEAN countries at large. Our findings are summarised as follows. First, the more restrictive RoOs are set in the products where plus‐one countries are less competitive against most ASEAN countries. Second, the more restrictive RoOs are likely to be imposed in products that plus‐one countries protect with higher most favoured nation tariffs. These two results reflect the bargaining power among a plus‐on country and ASEAN countries and indicate that plus‐one's preference influences RoOs more strongly. Third, we find contrasting results between intermediate and final products. RoOs are likely to be less restrictive in intermediate products and more restrictive in final products when plus‐one countries have higher export competitiveness or when the majority of ASEAN countries have higher MFN tariffs. [ABSTRACT FROM AUTHOR]

International production networks in machinery industry have formed three large clusters, each of which is in East Asia, North America, and Europe. This paper investigates the recent evolvement of the connection between Factory Asia and Factory North America with highlighting the role of Latin American countries as a mediator. For this purpose, we utilized trade matrices and gravity equations to measure each country's level of commitment to each bilateral machinery trade after controlling the size of the economies, distance, and others. Our major findings are threefold: first, Mexico is the only Latin American country that plays a connecting role between two Factories. Second, in 2010–2019, the linkage of exports to Mexico from not only China but also other East Asian countries is strengthened particularly in machinery parts and components. Third, export linkage of China with Mexico is further intensified in 2019–2021 particularly in machinery parts and components due to the US-China confrontation, the USMCA, and other factors. [ABSTRACT FROM AUTHOR]

This document is an introduction to a special issue of the journal "Chinese Economy" that focuses on the comparisons and connections between the Chinese economy and Latin America. It provides summaries of several papers included in the special issue. The papers cover topics such as the importance of Sino-Latin American trade for economic growth, China's role as a major lender in Latin America, and the differences in China's approach to South America and Mexico due to the United States' influence. The article also discusses the impact of China on trade relationships with Mexico and various Latin American countries, highlighting the United States-Mexico-Canada Agreement (USMCA) as a factor that makes Mexico different from other Latin American economies from China's perspective. The article concludes by emphasizing the role of government policies in shaping these trade relationships and suggesting further research on the spillover effects of government decisions. [Extracted from the article]

The intensified geopolitical tension in Northeast Asia and the U.S.–China confrontation have shifted policy debates in Japan toward national security while the economic discussion has become thin. To regain more balanced policy talks, this paper tries to quantitatively comprehend the effect of the United States and its allies' export controls on the East Asian machinery production networks and Japan's trade performance. Major findings include the following four points: First, most of the supply chain decoupling policies by the Japanese government have been the ones to prepare for sudden interruptions of the supply of important items while decoupling policies for strategic competition are limited only in the context of the cooperation with the United States. Second, international trade statistics at the industry level do not show clear evidence of supply chain decoupling in East Asia due to the U.S. export controls, at least up to 2022. Third, however, the negative trade effect becomes visible at the product or individual firms' level, and the recent strengthening of the United States and its allies' export controls may augment the negative effect on machinery production networks. Fourth, although the scope of trade controls would expand further, the supply chain decoupling is likely to end up with a partial one. The paper claims that middle powers such as Japan must establish a well-balanced trade policy. [ABSTRACT FROM AUTHOR]

Supply chain decoupling in the US–China confrontation has generated serious uncertainties for private businesses. This paper focuses on machinery international production networks in East Asia and tries to find quantitative evidence on supply chain decoupling by using international trade statistics, particularly from the viewpoint of middle powers such as Japan. While data on the sectoral level of trade do not show any clear evidence of supply chain decoupling, some specific US export controls indeed affect international transactions when examined at a finely disaggregated level. We econometrically measure the effect of some of the US policies on Japanese exports to China. The recent strengthening of US export controls related to supercomputers and advanced integrated circuits is likely to generate further effects. Nevertheless, the supply chain decoupling seems to end up as a partial one, and a large portion of International Production Networks (IPNs) may remain active. In conclusion, the paper briefly discusses the policy implications of the analysis. [ABSTRACT FROM AUTHOR]

Using a unique firm‐level data set from Asia, this study examines what determined the robustness and resilience of supply chain links, that is, the ability of maintaining links and recovering disrupted links by substitution, respectively, when firms faced economic shocks due to the spread of the coronavirus disease (COVID‐19). We find that a supply chain link was likely to be robust if the link was between a foreign‐owned firm and a firm located in the foreign‐owned firm's home country, implying that homophily on a certain dimension generates strong ties and thus supply chain robustness. We also find that firms with geographic diversity of customers and suppliers tended to increase their transaction volume with one partner while decreasing the volume with others. This evidence shows that firms with diversified customers and suppliers are resilient, mitigating the damage from supply chain disruption through the substitution of partners. Furthermore, the robustness and resilience of supply chains are found to have led to higher performance. [ABSTRACT FROM AUTHOR]

This paper provides empirical evidence that supports the continuing importance of machinery international production networks (IPNs) in East Asia. We first confirm their robustness and resilience, even during the coronavirus disease (COVID-19) pandemic, as well as the significance of East Asian countries as suppliers of machinery final products and parts and components for the world. Then, we demonstrate how deeply East Asian countries are committed to machinery IPNs by applying a gravity equation to pre-pandemic bilateral machinery trade and comparing actual values with fitted values of the estimated equation. The gravity estimation exercise indicates that machinery trade is basically regional—within Factory Asia, Factory North America, and Factory Europe—but Factory Asia also has strong inter-regional linkages. It also verifies that ASEAN has played an important role in Factory Asia, going far beyond the gravity prediction, for the development of machinery IPNs. [ABSTRACT FROM AUTHOR]

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-9701.2008.01135.x Byline: Fukunari Kimura (1) Abstract: This paper reviews the eighth Trade Policy Review (TPR) for Japan. It begins with an appreciation of its fair and well-balanced work in updating knowledge on the progress of policy reform in Japan. The TPR confirms the recovery of the Japanese economy with some notable improvements in its policy environment, the example of which is competition policy. On the other hand, there still remain notable trade impediments, particularly in agriculture. Some agricultural products are still heavily protected by complicated border measures. This paper provides some supplementary information, namely that the domestic production of most of the heavily protected products, with the exception of rice, are highly concentrated geographically, suggesting the politico-economic background. The rise of regionalism is mentioned as another topical issue in Japan though the characteristics and significance of free trade agreement networking by Japan are not fully discussed by the TPR. The TPR praises Japan's effort in providing the generalised system of preferences (GSP), but this paper offers a somewhat sceptical view of the role of GSP as a useful tool for developing countries. Overall, the TPR for Japan is assessed as a good starting point for dealing with the remaining issues on international commercial policies in Japan. Author Affiliation: (1)Keio University, Japan

This paper investigates the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the trade-fall periods amid COVID-19 in 2020 using Japan's machinery trade at the most disaggregated level and decomposed them into two intensive margins (i.e., the quantity effect and the price effect) and two extensive margins (i.e., the entry effect and the exit effect). Our empirical results show that trade relationships for parts and components were robust even amid COVID-19 and that international production networks in machinery sectors were almost intact. They also demonstrate that COVID-19 brought positive demand shocks for specific products with special demand due to its nature in addition to negative supply shocks and negative demand shocks, which partially explains heterogeneous effects not only among sectors but also among products in the same sector. As of October 2020, Japan's machinery trade seems to have mostly recovered. [ABSTRACT FROM AUTHOR]

East Asian countries signed the Regional Comprehensive Economic Partnership Agreement (RCEP) in November 2020. This paper demonstrates the importance of ASEAN centrality in East Asian economic integration and makes a preliminary assessment of the agreement in terms of the four expected roles: liberalization, rulemaking, reducing policy risks, and forming a pro-trade middle power coalition. The comparison with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) reveals the strengths and weaknesses of RCEP. The paper emphasizes the importance of dynamic aspects of mega-FTAs after being in effect and claims that RCEP must be further developed as an evolving agreement. [ABSTRACT FROM AUTHOR]

We conducted a standard gravity exercise using worldwide disaggregated trade data to shed light on the influence of digital technologies on network trade. We found that growing investment in industrial robots in relatively lagging economies, together with imported digitally deliverable services, is enhancing bilateral network trade flows in East Asia, but not necessarily in other parts of the world. This suggests that exploring complementarities between machines and human resources in production blocks supported by better service‐link connectivity may allow newly developed economies to retain and expand the international division of labor. [ABSTRACT FROM AUTHOR]

The world trading system has been remarkably successful in many respects but is now under great strain. The causes are deep‐seated and require a strategic response. The future of the system depends critically on reinvigorating the WTO and policy change in the largest trading nations. Important measures are required to sustain the multilateral trading system, and urgent action is needed to avoid a scenario where the system fragments. The worst scenarios will disrupt global trade and see a world which splinters into large trading blocs (most likely centered on China, the European Union and the United States) and where trade relations are based to a large extent on relative power instead of rules. In such a world the smallest players – especially those whose trade is least covered by bilateral or regional agreements – will be at the greatest disadvantage. All countries will incur enormous costs only to try and reinvent a system that is already in place today under the WTO. Countries with very large current account surpluses should revisit the appropriateness of their macroeconomic and taxation policies. Policy makers should recognize that neither global nor bilateral trade imbalances can be effectively corrected through trade policy measures, only though changes in macroeconomic and structural policies. [ABSTRACT FROM AUTHOR]

In this paper, we explore the possible policy responses to the COVID‐19 pandemic shock as well as the related economic (financial crisis) shocks on trade and global value chains (GVC) in East Asia. We find that regional policy coordination is critical to mitigate and isolate the pandemic shock. It is important to identify the pandemic events early to flatten the pandemic curve at the national and regional level. This supports a recent study by the World Bank (2020), which highlights the importance of early mitigation policies during the pandemic shock. The cost of the pandemic and economic shocks will increase significantly when several countries in the region experience the pandemic shock concurrently. In this case, flattening the regional pandemic curve becomes important. The results also indicate the need for greater coordination in East Asia to mitigate the pending economic shock in terms of unemployment, corporate bankruptcy and financial market fragility. The paper also highlights that the stability of the GVC network is critical during the pandemic in terms of hedging the risk of disruptions to the procurement of critical medical and health products as well as maintaining service linkages to manufacturing, such as the logistics sector. Regional policy coordination and the stability of GVC will be valuable in the post‐pandemic recovery of the region. [ABSTRACT FROM AUTHOR]