Author: Shankaran Nambiar, MIER

China has come to occupy a prominent position on Malaysia’s trade agenda over the past few years and is now Malaysia’s fourth largest trading partner. China currently accounts for about 11 per cent of Malaysia’s global trade, lagging behind the likes of the US, Japan and Singapore.

This was not always the case. Between 1995 and 1999, only about three per cent of Malaysia’s exports moved towards China. Today, about ten per cent of Malaysia’s exports are destined for China. Only about two per cent of imports came from China in 1995, but more recently they have shot up to close to 13 per cent. Read the rest of this entry »

Author: Ken Heydon, LSE

As the Doha Round flounders, preferential trade agreements (PTAs) have become the centrepiece of trade diplomacy. The annual average number of PTA notifications since the WTO was established has been 20, compared with an annual average of less than three, during the four and a half decades of the GATT.

Such agreements, which now account for over half of world trade, share a number of characteristics. Read the rest of this entry »

Author: Shandre Thangavelu, NUS

The ACFTA (ASEAN China Free Trade Area) is one the world’s largest free trade agreements. As of January 2010, it encompassed 1.9 billion people, had a combined GDP of US$6.6 trillion and total trade amounted to US$4.3 trillion. Its Framework Agreement was signed in November 2002 and the Trade in Goods Agreement entered into force July 2005, followed by the Trade in Services Agreement in July 2007. In 2010, the full implementation of zero tariffs for most goods in the FTA is expected for China and the ASEAN6 (Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand), while the CLMV (Cambodia, Laos, Myanmar and Vietnam) will do the same later in 2015.

The key motivations of ASEAN for ACFTA is to access the growing Chinese market in services and manufacturing and to create one of the world’s largest trading areas. Read the rest of this entry »

Author: Shankaran Nambiar, MIER

The ASEAN-India Free Trade Agreement (AIFTA), which has been concluded after protracted discussions, is a strategic event that holds promise for both parties. The agreement is noteworthy as it completes ASEAN’s links with Asia’s two major emerging powers and two of the fast growing economies in the world, China and India. The FTA signals India’s readiness to contribute to the development of the region, and seek benefits from the process. There is no doubt that ASEAN welcomes India’s involvement in the region. A quick scan of recent trade figures, precisely because they lack lustre, suggests that India is looking beyond the present in concluding this agreement. This gives cause for optimism.

India’s trade with ASEAN has not been spectacular. India has been running a deficit with ASEAN in the last decade, and the deficit has been growing. Read the rest of this entry »

Author: Suiwah Leung, Crawford School, ANU

Vietnam weathered the global financial crisis surprisingly well. Real GDP growth of 4.6 per cent year-on-year for the period January-September 2009 is below that of China, but well above growth rates in most East Asian economies.

One factor behind this unexpected result is the still early stages of integration into the global economy. This has cushioned Vietnam from the immediate impact of the US financial crisis and from the more devastating effect of reduced manufacturing exports. The turnaround in monetary policy (from monetary tightening in mid-2008 to halving the official interest rate from 14 to 7 per cent per annum by November the same year) and the large program of fiscal stimulus (announced at around US$8 billion) also contributed to maintaining growth. Read the rest of this entry »

Author: Trevor Wilson, ANU

One of the Obama Administration’s most politically radical yet strategically insignificant policy shifts has been to resume regular diplomatic contact with the Burmese military regime. Indeed, Assistant Secretary of State for East Asia and the Pacific, Kurt Campbell, visited Burma in November.

In content, the new policy may seem not to amount to much – pursuing normal high-level exchanges on policy with the generals, providing some more assistance, and allowing regime leaders to travel to and in the United States. But it involves some deeply symbolical steps and recognises for the first time that some direct engagement with the regime might prove more effective in influencing the generals to change some of their unacceptable policies on political freedoms and human rights abuses. Read the rest of this entry »

Author: Peter McCawley

It is now almost five years since December 2004, when the great tsunami swept across more than a dozen countries in Asia. More than 230, 000 people died across the region. The cost to human life was mainly borne by Indonesia, in Aceh, where perhaps 170, 000 people were swept away. Five years later, the pain is still evident across Aceh. Many thousands of families will forever carry the memory of family members who were lost. The human cost was immense.

There are many lessons to be drawn about disaster relief policies in Asia from the experience of the 2004 tsunami. Below I list eight key lessons that need attention above all others. Read the rest of this entry »

Authors: Hadi Soesastro (CSIS, Jakarta) and Peter Drysdale (ANU, Canberra)

The idea that regional architecture in Asia and the Pacific is not up to the tasks it now needs to serve has been around for some time. It has been inspired in part by worries about the untidiness in the competing structures — across the Pacific, of APEC, and within East Asia, of ASEAN +3 and the East Asia Summit (EAS). There has also been a hankering after ‘robust’ regional institutions modelled on the arrangements in Europe or North America, however unsuited they are to Asia Pacific circumstances.

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What is different about the thinking that led to Prime Minister Rudd’s Asia Pacific Community proposal is that these worries are incidental to its main strategic motivation. Read the rest of this entry »

Author: Andew Elek

A potential Trans-Pacific Partnership (TPP) would be a preferential trading arrangement (PTA) to be built on the Trans-Pacific Strategic Economic Partnership Agreement (P4) between Brunei, Chile, New Zealand and Singapore which entered into force in 2006.

The P4 is an agreement among partners who understand the benefits of free trade. Singapore has never had any doubts while Chile and New Zealand learned the hard way. Read the rest of this entry »

Author: Luke Nottage, Australian Network for Japanese Law

Imagine a transnational regime with these institutional features:

• Virtually free trade in goods and services, including a ‘mutual recognition’ system whereby compliance with regulatory requirements in one jurisdiction (such as qualifications to practice law or requirements when offering securities) basically means exemption from compliance with regulations in the other jurisdiction. And for sensitive areas, such as food safety, there is a trans-national regulator.

• Virtually free movement of capital, underpinned by private sector and governmental initiatives. Read the rest of this entry »

Author: Deborah Elms, Temasek Foundation Centre for Trade & Negotiations, Singapore

The ambiguity in U.S. President Barack Obama’s November 13th statement on the Trans-Pacific Partnership (TPP) talks mirrors the somewhat torturous path in American trade policy to date on this topic. In his speech in Tokyo, President Obama said, ‘The United States will also be engaging with the Trans-Pacific partnership countries with the goal of shaping a regional agreement that will have broad-based membership and the high standards worthy of a 21st century trade agreement.’

Listeners in the audience could be forgiven for confusion. Was the United States in or out? What did the President mean by ‘engage’?

Read the rest of this entry »

Author: Greg Lopez, ANU

The reforms in the United Malay National Organisation (UMNO) may be a step in the right direction. Already, there are detractors suggesting that the reforms are meaningless as corruption is entrenched in Malaysia. What is more serious is Malaysia’s democratic deficit which undermines the citizens’ basic democratic right to choose their representatives without fear.

Malaysia is a dysfunctional democracy. The opposition coalition — Pakatan Rakyat (PR Peoples/Citizens Coalition) is under siege from the ruling party Read the rest of this entry »

Author: Joel Rathus, Adelaide University and Meiji University

At the fourth East Asian Summit, held on 25 October in Thailand, the leaders of Japan and Australia had the opportunity to air their ideas about the future form and function of East Asian regionalism.

As Acharya notes Australian PM Rudd and Japanese PM Hatoyama appear to have competing visions about how to re-order the region. But, at this stage, if only because both proposals share a level of deliberately in-built vagueness, it’s not easy to tell. Hatoyama, for example, seems ambivalent – or at least unsure – on what role the US ought to play in the region. Read the rest of this entry »

Author: Peter Drysdale, ANU.

Yesterday in Washington, Singapore’s Lee Kuan Yew was presented with a Lifetime Achievement Award by the US-ASEAN Business Council. It was an occasion dignified by tributes from two former US Presidents and presentations from former Secretaries of State, Henry Kissinger and George Shultz.

Lee’s speech traversed the implications of the shifts in world power and the institutional changes that are under way or in contemplation, and deserves close study, especially for those who are students of how thinking in Singapore might develop towards the Rudd and Hatoyama proposals for renovating regional architecture. Read the rest of this entry »

Guest Author: Maria Monica Wihardja, CSIS, Jakarta

This post looks at the interaction between economic and political institutions.

A theoretical study of a simple strategic complementary game with private and public information among partially informed agents such as central banks shows that initial fundamentals might give rise to different levels of transparency. Read the rest of this entry »