How Close is Asia to Already Being A Trade Bloc? / Chunding Li, John Whalley.

Format:

Book

Author/Creator:

Li, Chunding.

Contributor:

National Bureau of Economic Research.

Whalley, John.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20424.

NBER working paper series no. w20424

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

FTA bilateral and regional negotiations in Asia have developed quickly in the past decade moving Asia ever closer to an economic union. Unlike Europe with the EU and the 1997 treaty of Rome and the 1993 NAFTA in North American, Asian economic integration does not involve a comprehensive trade treaty, but an accelerating process of building one bilateral agreement on another. For countries in Asia there is negotiation of a China-Japan-Korea agreement, a China-India agreement, a Trans-Pacific Partnership (TPP) agreement, and a Regional Comprehensive Economic Partnership (RCEP). This paper uses a fifteen-country global general equilibrium model with trade costs to numerically calculate Debreu distance measures between the present situation and potential full Asia integration in the form of a trade bloc. Our results reveal that these large Asia economies can be close to full integration if they act timely in agreements through negotiation. All Asia countries will gain from Asia trade bloc arrangements except when the Asia FTA can only eliminate tariffs. These countries' gain will increase as bilateral non-tariff elimination deepens. Larger countries will gain more than small countries. Asia FTA, Asia Union and RCEP will benefit member countries more than ASEAN+3. Global free trade will benefit all countries the most.

Notes:

Print version record

August 2014.