Moving too slowly towards an ASEAN Economic Community

Container cargo ships unload containers at the Manila International Container Port in Manila, Philippines, 7 October 2014. Slow progress on the ASEAN Economic Community means it is unlikely to be established by the end of 2015. (Photo: AAP).

Author: Jayant Menon, Asian Development Bank

Launched as a political bloc and security pact in the aftermath of the Vietnam War, ASEAN has evolved to embrace an ambitious economic agenda. Its latest project is to establish the ASEAN Economic Community (AEC) by 31 December 2015. But is this likely? The blueprint for achieving the goal envisages the AEC standing on four pillars and meeting the deadline depends on progress on each of them. Read more…

Rough sailing in the iron ore shipping business

A crane prepares to load a COSCO shipping container onto a ship at the Port of Rizhao in Shandong province, China, 5 April 2014. Fearful of losing business and under the guise of safety concerns, COSCO successfully lobbied to have Valemax ships banned from docking at Chinese ports. (Photo: AAP)-minihighres

Author: Pascale Massot, University of British Columbia

The impact of Chinese demand on global iron ore prices is well known. A less acknowledged consequence of China’s emergence is the transformation of incentive structures in the global shipping market. Dramatic increases in freight rates shifted global iron ore producers’ comparative advantage further in favour of Australian exporters to the detriment of the Brazilians. During the commodities boom, between 2002 and 2008, the freight differential between Brazil–China and Australia–China rates increased to around US$60 per tonne for 150,000–160,000 deadweight tonne (dwt) ships. Read more…

Refining the role of government in the Australia–Indonesia live cattle trade

Indonesian workers unload Australian cattle from a ship in Jakarta, Indonesia. (Photo: AAP).

Author: Ray Trewin, ANU

The governments of Australia and Indonesia have become heavily involved in the live cattle trade. The 2011 Australian ban on live cattle exports to Indonesia, after some animal cruelty was drawn attention to, may have been the blackest day for Australian agricultural politics. And the issues continue, as governments inappropriately use trade policy to address sensitive domestic non-trade issues (like Australian animal welfare and Indonesian self-sufficiency). But government involvement, rather than disadvantaging trade and livelihoods by raising uncertainty and lowering prices as is the case now, could help solve these issues. Read more…

Is bigger better for ASEAN in a mega-regional world?

This photo shows a view of a container port in Singapore. Singapore is part of negotiations in both RCEP and the TPP, two mega-regional deals involving ASEAN countries. (Photo: AAP)

Author: Razeen Sally, NUS

Big-block trade agreements or ‘mega-regionals’, revolving around one or more major powers, are the latest trend in trade policy negotiations. ASEAN is involved in two: the American-led Trans-Pacific Partnership (TPP) and the Chinese-led Regional Comprehensive Economic Partnership (RCEP). Read more…

Can Nishikawa resolve Japan’s TPP agricultural impasse?

Newly appointed Minister of Agriculture, Forestry and Fisheries Koya Nishikawa speaks during a press conference at the official residence of the Japanese prime minister in Tokyo, 3 September 2014. (Photo: AAP)

Author: Aurelia George Mulgan, UNSW Canberra

Japanese Prime Minister Shinzo Abe’s appointment of Koya Nishikawa as the new Minister of Agriculture, Forestry and Fisheries (MAFF) is a big plus for the Trans-Pacific Partnership (TPP). Nishikawa is an executive of the so-called ‘agricultural tribe’ (norin zoku) in the ruling Liberal Democratic Party (LDP). Read more…

Why the US struggles against Japan in TPP negotiations

US Trade Representative Michael Froman speaks to reporters while Japanese Economy Minister Akira Amari looks on during a press conference at the Trans-Pacific Partnership (TPP) Ministerial Meeting in Singapore, 20 May 2014. Trade ministers from 12 nations completed a two-day Ministerial meeting in Singapore targeted at creating a 12-nation trade pact in the Asian-Pacific region. (Photo: AAP).

Author: Aurelia George Mulgan, UNSW Canberra

Real progress in Trans-Pacific Partnership (TPP) negotiations has stalled until Japan and the United States reach some kind of basic trade agreement — which is still elusive even after numerous rounds of talks. The United States has been pressuring Japan to make concessions in key areas such as agriculture.

It is well known that current TPP negotiations are running on two separate tracks: the plurilateral track in which all 12 countries are participating and the bilateral track which amounts to a series of bilateral deals being negotiated on the side. Read more…

Building Silk Roads for the 21st century

View of an elevated highway among mountains at sunrise in Chongqing, China, 19 July 2014. From 1992 to 2011 China spent 8.5 per cent of GDP on infrastructure. (Photo: AAP).

Author: Pradumna B. Rana, RSIS

China’s emergence as the ‘factory of the world’, based on its focus on exporting labour-intensive manufactures, is well-known. Less well-known is the role that infrastructure played in this strategy.

From 1992 to 2011 China spent 8.5 per cent of GDP on infrastructure, much more than the developing country average of 2–4 per cent, according to a 2013 McKinsey Global Institute report. And, from 1992 to 2007, China spent US$120 billion on building 35,000 kilometres of highways. Read more…

It’s do or die for the TPP

US President Barack Obama speaks to US Trade Representative Ron Kirk during a meeting with TPP leaders at the APEC summit in Honolulu, Hawaii, 12 November 2011. Those talks failed to finalise negotiations on the partnership before a previous deadline of 2012. (Photo: AAP)

Author: Claude Barfield, AEI

Heading into the fifth year of intense negotiations (with twenty-odd formal sessions and countless informal side meetings), the Trans-Pacific Partnership (TPP) agreement will almost certainly succeed — or fail — over the next six months. Read more…

Will Indonesia’s new president turn the tide on resource nationalism?

Freeport security personnel look on at the Freeport McMoRan's Grasberg mining complex, one of the world's biggest gold and copper mines, located in Indonesia's remote eastern Papua province, 16 August 2013. After an export ban last year, Freeport recently agreed to pay high royalties and taxes, and concede divestment provisions. (Photo: AAP)

Author: Eve Warburton, ANU

Resource management is a pressing policy problem in Indonesia, but it is also ripe for nationalist grandstanding. In the lead up to Indonesia’s recent elections, both presidential candidates deployed the mantra of energy independence and resource sovereignty in their campaigns.

The victor, Joko Widodo (Jokowi), used far less incendiary language than his competitor, Prabowo Subianto. But both espoused a nationalist vision for the mining and energy sectors Read more…

India refuses to play ball on trade agreement

Indian workers sit near sacks of grain at a wholesale warehouse in Mumbai, India, 2 September 2013. India refused to sign the Trade Facilitation Agreement agreed upon by the WTO in Bali because it was not happy with insufficient progress on issues like the stockpiling of grain. (Photo: AAP)

Authors: Geethanjali Nataraj and Richa Sekhani, Observer Research Foundation

India has played the spoiler by refusing to sign the global agreement on trade facilitation agreed at the Bali Ministerial of the World Trade Organisation in December 2013. The signing of the agreement would have resulted in the first global trade reform agreement in the history of the WTO. Read more…

South Korea should keep calm and carry on through EU trade squall

A view of the Busan Container Terminal in Busan Port, South Korea, 11 July 2014. (Photo: AAP).

Author: Judith Cherry, University of Sheffield

The EU–South Korea free trade agreement (FTA) — implemented on 1 July 2011 — was South Korea’s seventh FTA and the EU’s first trade deal with an Asian country. At the time, analysts forecast that both sides stood to gain economically, with South Korea obtaining two-thirds of the total gains from an EU–South Korea FTA.

But, today, the benefits of the FTA for South Korea are still yet to be realised. Read more…

G20 must shape a new world trade regime

The G20 meeting at the IMF/World Bank Spring Meetings 11 April 2014 at the IMF Headquarters in Washington, DC. (Photo: AAP).

Authors: Mari Pangestu and David Nellor, Indonesia

Over the past decade global trade and investment discussions have moved far away from the formal global trade regime. The multilateral system has been mired in the Doha Development Round — defined by a single undertaking and a fixed agenda that is increasingly out-of-date. In the meantime, most countries have devoted their energies to regional trade and investment discussions. Read more…

India looks east to RCEP for economic growth

Billboard of an aircraft on final approach outside the venue of the  India-ASEAN Business Fair and Business Conclave in New Delhi, (Photo: AAP).

Author: Ganeshan Wignaraja, ADBI

Indian Prime Minister Narendra Modi is set to visit Japan after the budget session of parliament in mid-August 2014 for his first state visit outside South Asia. Reinvigorating economic ties with Japan and the rest of East Asia presents a critical opportunity for the Modi Government to foster new business opportunities and address India’s recent growth slowdown. By looking to East Asia, business and government can work together to foster economic gains for India. Read more…

We must improve trade connectivity in South Asia

Indian passengers travel on a train in Amritsar on 20 June 2014. (Photo: AAP).

Authors: Bipul Chatterjee and Joseph George, CUTS International

South Asian countries trade with each other far less than they could. The high cost of doing trade in the region, among the highest in the world, is the prime deterrent of trade among South Asian countries. An urgent upgrade of transport connectivity is needed in order to revitalise regional trade and decrease costs.

But there is more to trade connectivity than usually thought, and, in South Asia, improvement in transport connectivity alone may not be enough to spur a rise in trade volume. Read more…