Author: Ganeshan Wignaraja, ADBI

Mega-regional trade deals are in vogue.

Negotiations for the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are grabbing headlines around the world. Meanwhile, Asia’s own mega-regional trade deal — the Regional Comprehensive Economic Partnership (RCEP) — is quietly being negotiated. Read more…

Author: Ganeshan Wignaraja, ADBI

Indonesia, ASEAN’s largest economy, faces a growth dilemma. Faltering growth has prompted the introduction of new restrictive trade and investment measures.

Yet  such policies have historically had little success in connecting enterprises with global value chains. Read more…

Author: Ganeshan Wignaraja, ADBI

Over the past decade, China and India have emphasised FTAs to gain market access amidst an impasse at the WTO Doha Round and signs of protectionism.

With 12 FTAs in effect in China and 13 in India as of June 2012, the Asian giants are among the FTA leaders in the Asia Pacific. Read more…

Author: Ganeshan Wignaraja, ADB

While rapid trade-led growth has enabled China to surge ahead of other developing economies in recent decades, a number of analysts are projecting that India’s growth rates will soon outpace China’s.

India’s democratic political culture and favourable demographics, both of which are viewed as being more conducive to sustaining rapid economic growth over the long-term, are often cited as reasons for this. But amid such speculation, several key factors — including market conditions, economic policies and supply-side factors — suggest that China will continue to outperform India over the next decade. Read more…

Authors: Masahiro Kawai and Ganeshan Wignaraja, ADBI, Tokyo

There is a lively debate going on about the impact of free trade agreements (FTAs) on East Asia’s business between those who view the agreements as a harmful Asian ‘noodle bowl’ of trade deals and others who see net beneficial effects in terms of regional liberalization and a building block to multilateral liberalization. A lack of enterprise-level data has made it difficult to resolve the debate. Providing new evidence from surveys of 609 East Asian firms (in Japan, Singapore, Korea, Thailand and the Philippines), our new study seeks to address the critical question of whether the Asian noodle bowl of multiple overlapping FTAs is harmful to business activity particularly small SMEs.

The surveys suggest that the Asian ‘noodle bowl’ does not seem to have severely harmed the region’s business activity to date. Use of FTA preferences (22 per cent of responding firms) is higher than expected from previous studies. Furthermore, only 27 per cent of responding firms said that multiple rules of origin significantly added to business cost. As more FTAs under negotiation take effect and the complexity of the Asian ‘noodle bowl’ increases, however, the impact on business is likely to intensify. Implementation of key policies and closer public-private sector cooperation can help mitigate negative effects and facilitate a more SME-inclusive business response to FTAs. Suggestions include: encouraging MFN liberalization, rationalisation of rules of origin, upgrading origin administration, increased awareness of FTA provisions, improving business participation in FTA consultations and SME support.

See the full ADBI working paper here