Regional Trading Arrangements

2003-2005

The need for this work program arises because the current work program has exposed several systemic issues that require further in-depth analysis, because further developments in the region will inevitably occur and demand analysis and investigations, and because much remains to be done to increase the understanding of RTA issues among both the officials and the business community.

New initiatives and developments of existing initiative will be analyzed as they arise, thereby adding to the Forum’s store of accumulated knowledge and expertise, and increasing the level of understanding of the implications of RTA development in the region.  The role of RTAS in relation to tht e trans-Pacific partnership will be a central focus in this work.

The Forum will continue to contribute to APEC’s deliberation on the RTA issue.  It will be invited to participate in a high-level symposium on RTAs to be held by APEC in Chile in the fist half of 2004.

We will continue to learn from the extensive experiences of RTAs in the Americas.  Researchers from Latin American networks are to be invited to the proposed PECC Trade Forum/APEC Study Center in Chile in May 2004, and will provide a further opportunity for cross-fertilization between networks in the two regions.

The task force will participate with the IDB, through its LAEBA offshoot, in a project on the use of RTAs as vehicles for the delivery of regional public goods.

The implications of inconsistent provisions in multiple RTAs for business transaction costs and for the possibility of ultimate convergence of RTAs will be a key set of systemic issues to be considered by the task force.  The role of rules of origin is a subject that needs much more investigation, and the task force will work on this in conjunction with a project being implemented by the IDB.  The possibility of establishing “best practice” guidelines for at least some provisions typically included in RTAs is also seen as worthwhile line of investigation.

Preliminary discussions have been held with the Finance Forum on the possibility of joint work on aspects of regional economic integration.

This task force will also take up additional systemic issues in the global and regional trading systems identified as high priorities by member committees, provided adequate expertise can be made available to the task force

The Forum's work for 2003-2005 will concentrate on the following sub-topics:

• Analysis of existing and new initiative
• Analysis of "best practice" and compatibility provision and discussion on the prospect of "convergence"
• Analysis on "sequencing" of integration/liberalization initiatives, "layered"/"multi-level"/"unbundled" integration, and "two-speed"/ "multi-speed" integration
• Comparison of East Asian/Americas dimension
• "Guidelines" for conditions to be fulfilled by RTAs conforming to GATT Article 24

Regional Trading Arrangements Task Force (2001-2003)
The Asia-Pacific region had since the mid-1990s, opted for a unilateral and non-preferential route to trade liberalization based on open regionalism. Under this approach, economies, especially in East Asia, mainly undertook unilateral liberalization on a MFN basis, which was encouraged, among others by regional peer pressure.

However, since the late 1990s there has been a shift from the non-preferential to the preferential route to trade liberalization. A wide variety of arrangements has been proposed, ranging from bilateral agreements to much larger trading blocs. These developments have created considerable controversy and tensions within the region, and raised questions about whether and under what conditions they can be viewed as contributing towards APEC objectives.

It is important to understand the underlying trends and characteristics of the current spate of proposed preferential trading arrangements in the regional and more importantly its potential impact.

The Forum's work on this issue will concentrate two areas: the design of the arrangements and how they fit into the larger trading regimes; and how they may affect the long-term sustainable development of the entire region.

PECC Trade Forum in its meeting in Bangkok, June 2001, has taken the initial steps in stock taking and analyzing the various proposed and formalized RTAs. Only by doing so, can there be a well informed discussion of the steps to be taken to ensure that economic regionalism will still pave the way toward an open and rules-based trading system. (Summary of the meeting is summarized in PECC Publication: Issues@PECC: Regional Trading Arrangements: Stock Take and Next Steps

The Forum's work on this issue will continue to concentrate on two areas: the design of the arrangements and how they fit into the larger trading regimes; and how they may affect the long-term sustainable development of the entire region.

At the Trade Forum meeting in May 2002 Lima, Peru, the Forum took lessons from the Latin American experiences. The Forum also analyzed the process of RTA formation in the Asia-Pacific region, and explored the development of principles for "APEC-Consistent" or "APEC-Friendly" RTAs.

In Vancouver, Nov 2002, the Trade Forum sets itself the task of exploring the possibility of developing a set of "APEC Principles" on RTA design and implementation.  It could represent a PECC Trade Forum response to the call by APEC Ministers at Los Cabos for a "constructive exchange of views on....RTA and FTAs"

By the time of the PECC General Meeting in Brunei, September 2003, two major outputs are envisaged:

1. A set of "RTA Principles", setting out the conditions under which RTAs in the APEC region can be regarded as not only WTO-consistent but also consistent with APEC's principles and objectives
2. A comprehensive set of papers analyzing the RTA developments in the Asia Pacific region from a range of perspectives, intended to serve as a principal source of information and policy analysis on these development

The RTA task force is lead by Fernando Gonzalez Vigil, a member of Peru National Committee of PECC.

Result (2001-2003):

PECC released its work on RTAs on September 3 with the Brunei Declaration. PECC has proposals for a common understanding on RTAs for APEC and backs it with extensive analysis. The Publication is available on the PECC Publication web page free of charge

Selected Papers from the meetings

Access to some papers is restricted because they are not for formal citation.  Please contact authors for permission

PECC/ASC Joint Meeting, 25 May 2003, Phuket

Presentation on Drafts of "State of Play and "Analysis" Papers in preparation for the Trade Policy Dialogue

• Draft of the "RTA Developments in the Asia Pacific Region: State of Play", by Robert Scollay
• Draft of the "Asia Pacific RTAs as Avenues to Achieving the Bogor Goals: Analysis and Ways Forward", by Robert Scollay (power point presentation)

East Asian Approaches to RTA Development in the Region

• Japan-ASEAN Comprehensive Economic Partnership: Vision and Tasks Ahead, by Ippei Yamazawa
• Korea's FTA policy, by Inko Cheong
• ASEAN Perspective on RTAs, by Hadi Soesastro
• East Asian Economic Integration: Critical Policy Choices, by Andrew Elek (power point presentation)
• Pathfinder Initiatives and APEC Guiding Principles for Facilitation, by Andrew Elek
• Rules of Origin, Regional Integration and South East Asia, by Paul Brenton

The Trans-Pacific Dimension of Asia-Pacific Integration and Potential for Linkages beyond the Region

• Singapore-United States FTA, by Chia Siow Yue
• India's Approach to Regional Trade Arrangements in East Asia: Trends and Prospect, by Nagesh Kumar
• Trans-Pacific Dimensions of the "New" RTA Developments, by Neantro Saavedra Rivano

Towards an Open Asia Pacific Region: Current Challenges and Future Prospects, 22-23 April 2003, Washington DC

IIE, 22 April 2003

Strategies for Managing the Consequences of a Proliferation of RTAs and Encouraging Convergence Toward Regional and Global Liberalization and Integration Objectives

• Christopher Findlay (The Australia National University)
• Soogil Young (Kim & Chang, Korea)
• Soamiely Andriamananjara (USITC) (power point presentation)
• Fernando Gonzalez Vigil (University of the Pacific, Peru)
• Mari Pangestu (CSIS, Indonesia)

Key Issues in the Evolution of RTAs within Multilateral and Wider Regional Trading Systems
(1) Treatment of "Sensitive Items" (especially agriculture) in RTAs and links to WTO rules, disciplines, and negotiations

• Marcos Jank (University of Sao Paulo) (power point presentation)
• Rob Scollay (University of Auckland)
• Ernesto Tironi (Universidad de Chile)

(2) Issues in the Treatment of Investment in Regional Agreements: Analytical Issues and Comparative Perspectives

• Christian Daude (University of Maryland) (power point presentation)
• Maryse Robert (OAS)

IADB, 23 April 2003

Regional Trade Agreements in Comparative Perspective: Latin America and The Caribbean and Asia-Pacific

Dynamics of Competitive Liberalization in RTA Negotiations: Comparative Perspectives on Hub and Spoke Patterns, Domino Effects and Prospects for Convergence or Amalgamation of RTAs

• Rob Scollay (PECC Trade Forum Coordinator)
• Richard Feinberg  (University of California, San Diego)
• Hadi Soesastro(CSIS, Indonesia)

Institutional and Architectural Issues in RTAs: Coping with the Spaghetti Bowl and Innovative Approaches and Instruments in RTAs

• Antoni Estevadeordal (IADB) and Kati Suominen (University of California, San Diego)
  (power point presentation)
• Linda Low (National University of Singapore) (power point presentation)
• Paul Brenton (World Bank) (power point presentation)

Developing Patterns of Regional Trading Arrangements in the Asia-Pacific Region: Issues and Implications, 11-12 November 2003, Vancouver

RTAs and the Evolution of Asia-Pacific Regionalism

• Preferential Trade Arrangements and the Future of Asia-Pacific Economic Integration, Dr Soogil Young, Vice-Chair, KOPEC; Research Advisor, Korea International Trade Association; Coordinator, PECC Finance Forum
• The Current “State of Play” in the FTAA Negotiations, Dr Maryse Robert, Organization of American States

Non-Traditional Perspectives on RTAs

• Regional Public Goods [Powerpoint presentation and/or PDF format], Dr Antoni Estevadeordal, Inter-American Development Bank
• Developmental Affinities as a Rationale for Asia-Pacific RTAs
  Professor Neantro Saavedra-Rivano, University of Tsukuba, Japan

Strategic Perspectives

• Strategies Towards the Development of New Regional Trading Arrangements in East Asia
  Dr Hadi Soesastro, Centre for Strategic and International Studies, Indonesia

Practical Implications of the Spread of RTAs: Perspectives from East Asia and Latin America

• Reacting to East Asian Regionalism: A Perspective from Chinese Taipei
  Dr Rong-I Wu, Taiwan Institute of Economic Research
• Facing Economic Integration on Two (or More) Fronts: The Situation of the Pacific Latin American Economies
  Professor Fernando Gonzalez Vigil, Universidad del Pacifico, Peru

Asia-Pacific RTA Developments in Broader Perspective 

• The Enduring Logic of Asia-Pacific Regional Integration
  Associate Professor Rob Scollay, University of Auckland

Additional Papers:

• Implications for the Multilateral Trading System of the New Preferential Trading Arrangements in the Asia-Pacific Region
  Prof. Peter Lloyd, University of Melbourne
• Economic partnerships in East Asia: globalization or trading blocs?
  Andrew Elek, The Foundation for Development Cooperation and The Australian National University
• A Case for East Asian Cooperation
  Prof. Ippei Yamazawa, Institute for Developing Economies and Waseda University, Japan

Regional Trading Arrangements, 17-19 May 2002, Lima

The Impact of RTAs on Asia-Pacific Trade Integration

• A Case of East Asian Regionalism, by Ippei Yamazawa, Waseda University
• Trans-Pacific Trade Integration: New Trends and Future Prospects, by Mikio Kuwayama, Economic Commission for Latin America and the Caribbean
• Dominos, Blocs, and the Process of RTA Formation in the Asia Pacific Region, by Rob Scollay, University of Auckland
• Cross-Pacific Trade Arrangements within APEC and Their Role in the Emerging World System, by Neantro Saavedra-Rivano, University of Tsukuba
• New Regionalism and New Bilateralism in the Asia Pacific, by Peter Lloyd, University of Melbourne

RTAs in the Americas: Experiences and Lessons

• Effects in Investment Location and Trade Patterns: Andean Community case, by Fernando Gonzalez Vigil
• The Impact of the FTAA in the Americas and the Pacific: Challenges and Expectations, by Esteban Restrepo-Uribe, Politecnico Grancolombiano, Colombia
• RTAs in the Americas, by Antoni Estevadeordal
• The Chilean Strategy of Trade, by Japan Ministry of Foreign Affairs, for ECLAC

The Developing Pattern of RTAs in East Asia

• A Case Study in the Process of Regional Economic Integration: The Auto Industry in ASEAN, by Joy Abrenica, Society for the Advancement of Technology Management in the Philippines
• The Enlargement and Prospect of the Bangkok Agreement, by Yang Jijian, China Academy of International Trade and Economic Cooperation
• Korea's Role in the Development of RTAs in East Asia, by Chan-Hyun Sohn, Korea Institute for International Economic Policy
• Sustainable Exchange Rate Regimes and Regional Stability, by Ho Lok Sang, Lingnan University

Issues in RTA design and Rules

• Encouraging Pathfinder Initiatives in APEC: Guidelines for New Economic Partnership, by Andrew Elek, Australia National University
• A Latin America Perspective on Reform of Article XXIV, by Monica Rosell, Andean Community Secretariat, Peru
• Complying with WTO Rules: The Challenges for Small Developing Countries, by Rob Scollay, University of Auckland
• A Small States' Perspective on Reform of Article XXIV, by Mere Falemaka, Pacific Islands Forum Secretariat, Fiji

Regional Trading Arrangements:
Stocktake and  Next steps,12-13 June 2001, Bangkok

Stocktaking: Trends in Regional Arrangements in the Asia-Pacific

• Regional Trade Arrangements in Asia Pacific: Where are they taking us?, Mari Pangestu, Centre for Strategic and International Studies (CSIS), Jakarta, Indonesia and Christopher Findlay, Australia National University  
• RTAs Trends in the APEC Region, Robert Scollay, University of Auckland, New Zealand
• RTA Developments in the Western Hemisphere, Juan Jose Taccone, Inter America Development Bank

Perspectives on the Future Configuration of Asia-Pacific Trade Relations

• Whither ASEAN plus 3?, Hadi Soesastro, CSIS, Jakarta, Indonesia
• The FTAA: State of Play, Next Steps, and Implications
  Maryse Robert, Organisation of American States (OAS)
• Regionalism and Multilateralism: Work on Systemic Issues in the WTO, Edsel Custodio, former Chair of CRTA, WTO
• RTAs: Policy Choices for the United States, Richard Feinberg, UC San Diego, US
• RTAs: Japanese Perspective, Shujiro Urata, Waseda University, Japan
• The Trend of East Asian Cooperation, Zhang Yunling, Chinese Academy of Social Sciences (CASS), Beijing, China  

Analytical and Policy Issues in New Asia-Pacific RTA Developments

• Preferential Trade Liberalization: The Traditional and New Developments, Arvind Panagariya, Chief Economist, Asian Development Bank
• Assessing Regional Trading Arrangements in the Asia Pacific, John Gilbert, Washington State University, US, Robert Scollay, APEC Study Center, University of Auckland, Bijit Bora, Trade Analysis Branch, UNCTAD

• Implications of Proliferating Sub-regional Trade Agreements : Lessons from the Latin American Experience, Jose M. Salazar, Trade Unit, OAS

Case Studies on RTA Development

• Japan’s FTAs with Singapore, Korea and Mexico, Ippei Yamazawa, Waseda University and Institute of Developing Economies
• Japan Korea's FTA Developments, Chan-Hyun Sohn, Korea Institute for International Economic Policy (KIEP)
• Singapore’s RTA Strategy, Linda Low, National University of Singapore
• Canada's Regional Arrangements: Advances and Challenges, Daniela Ivascanu, Department of Foreign Affairs and International Trade, Canada
• Australian Perspective on the AFTA-CER Proposal, Hamish McCormick, Department of Foreign Affairs and Trade, Australia

Trends and Issues in the Design of Modern RTAs

• Liberalization of Trade in Services: East Asia and the Western Hemisphere, Sherry Stephenson, Organization of American States (OAS), Washington D.C., US and Deunden Nikomborirak, TDRI
• Deeper Integration: Competition and Investment, Peter Lloyd, University of Melbourne, Australia
• Chile and the USA: Why a FTA?, Oscar Facusse, Catholic University, Chile

The Way Ahead

• The Way Ahead
  Ippei Yamazawa, Waseda University and Institute of Developing Economies
• APEC-Friendly Economic Partnerships
  Andrew Elek, Australian National University, Australia
• RTAs: Stocktake and Next Steps
  Mari Pangestu, Centre for Strategic and International Studies (CSIS), Jakarta, Indonesia
  Robert Scollay, APEC Study Center, University of Auckland