Evolutionary paths toward a region-wide economic agreement in Asia

Abstract

The creation of a region-wide economic agreement in Asia has become a hot topic among trade policymakers in the region. The Asia-Pacific Economic Cooperation (APEC) 2010 Summit Statement clearly states that members should pursue a Free Trade Area of the Asia-Pacific (FTAAP) by building on various ongoing regional cooperation frameworks including the Association of Southeast Asian Nations (ASEAN)+3, ASEAN+6, and the Trans-Pacific Partnership (TPP). This paper attempts to streamline the policy arguments over sequencing issues by clarifying the pros and cons of various paths toward a future region-wide agreement in Asia. The paper presents two possible approaches: consolidation versus expansion. It then identifies how the two approaches differ in terms of evolutionary parameters including the timing of negotiations, scope of agreement, and development of membership. The driving forces behind the evolution of regional agreements in each approach are also clarified. The second half of the paper analyzes three possible paths toward a region-wide agreement—ASEAN+α free trade agreements, TPP, and the Asia-Pacific Trade Agreement (APTA)—in terms of both evolutionary parameters and driving forces.