Author: Masahiro Kawai, ADBI

According to the Asian Development Bank (ADB) study Institutions for Asian Integration: Toward an Asian Economic Community (2010), Asia is supported by a dense web of 40 overlapping regional and sub-regional institutions that promote regional cooperation and integration at the intergovernmental level.

Yet with few formal or explicit commitments from members of these institutions, Asia remains ‘institution-light’. Read more…

Author: Masahiro Kawai, ADB Institute, Tokyo, and Ganeshan Wignaraja, ADB, Manila

Slow progress in global trade talks has led to a surge in free trade agreements (FTAs) across Asia. With the World Trade Organization (WTO) Doha Round trade talks stalled, Asian countries see FTAs as a means to liberalise trade and investment and sustain economic recovery in the region.

The surge in the number of FTAs — from three to about 50 in the last decade, with another 80 or so in the pipeline — has, however, sparked concerns about the Asian noodle bowl due to overlapping rules of origin (ROOs) requirements, which may be costly to business, especially small- and medium-sized enterprises (SMEs). Critics worry that this wave of agreements will undermine the multilateral liberalisation process. Read more…

Author: Masahiro Kawai and Michael Pomerleano, ADBI

In response to the global financial crisis, the international financial community established the Financial Stability Board (FSB). The FSB aims to address vulnerabilities and develop and implement strong regulatory, supervisory and other policies in the interest of financial stability.

The FSB mandate is sweeping. 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