EU, NAFTA, and Asian Responses: A Perspective from the Calculus of Participation / Junichi Goto, Koichi Hamada.

Format:

Book

Author/Creator:

Goto, Junichi.

Contributor:

National Bureau of Economic Research.

Hamada, Koichi.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5325.

NBER working paper series no. w5325

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

EU, NAFTA, and Asian Responses

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1995.

Summary:

This paper assesses the economic conditions for Asian countries to cope with the formation of EU and NAFTA. Is it desirable for them to form their own trading area? And, if desirable, is it better to have a closed one like the EAEC or a more open one like the APEC? Relying on public economics and the calculus of participation combined with the Dixit-Stiglitz-Krugman framework, we find the following: (i) the development of the EAEC by the leadership of Malaysia would be a natural response of Asian countries against two big blocs in the world, EU and NAFTA; (ii) it is natural for the United States to discourage this move because the formation of an economic bloc in Asia will have a negative economic impact on the non- Asian countries; (iii) it is natural for the U.S. to propose an opposing coalition like the APEC to nullify the possible economic impact of the EAEC; but (iv) perhaps the APEC will be a good roundabout way towards international free trade.

Notes:

Print version record

October 1995.