Regionalism as an Engline of Multilateralism: A Case for a Single East Asian FTA

ADB Working Paper Series on Regional Economic Integration No. 14

40 Pages Posted: 25 Jun 2008 Last revised: 12 Aug 2008

See all articles by Masahiro Kawai

Masahiro Kawai

Asian Development Bank Institute

Ganeshan Wignaraja

Asian Development Bank

Date Written: February 1, 2008

Abstract

As East Asia becomes increasing integrated through market-driven trade and FDI, free trade agreements (FTAs) are proliferating. Consodildation of mutiple and overlapping FTAs into a single East Asian FTA can help mitigate the harmful noodle bowl effects of different or competing tariffs, standards and rules. A region-wide FTA will also encourage participation of low-income countries and reduce trade-related business costs, particularly for small and medium enterprises. A computable general equibrium (CGE) model examines the economic impact of various types of FTAs in East Asia (among ASEAN 1's, ASEAN 3, and ASEAN 6) finding that consolidation at the ASEAN 6 level would yield the largest gains to East Asia among plausible regional trade agreements.

Keywords: Free trade agreement, ASEAN, multilateralism, CGE models

JEL Classification: F13, F15, F17

Suggested Citation

Kawai, Masahiro and Wignaraja, Ganeshan, Regionalism as an Engline of Multilateralism: A Case for a Single East Asian FTA (February 1, 2008). ADB Working Paper Series on Regional Economic Integration No. 14. Available at SSRN: https://ssrn.com/abstract=1151062 or http://dx.doi.org/10.2139/ssrn.1151062

Masahiro Kawai

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F 3-2-5
Kasumigaseki Chiyoda-ku
Tokyo, 100-6008
Japan

Ganeshan Wignaraja (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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