Foreign Trade and Investment Policies in Developing Asia

Abstract

This paper examines the evolution of foreign trade and investment policies in developing Asian countries vis-à-vis emerging market countries and other developing countries in the rest of the world since the mid-1980s. It reveals that non-Asian emerging market countries have made appreciable progress in closing the “trade policy gap” with leading East Asian countries. It also reports indications that emerging market countries outside Asia are more liberal today in their policies toward foreign direct investment than many if not most East Asian countries. In the aftermath of the Asian financial crisis and recession, these findings point to the importance of maintaining, if not also deepening, reforms to foreign trade and investment policies in developing Asia. This is important so that the region might continue to attract a commanding share of foreign direct investment flows and enjoy the related trade and other economic benefits of this investment in the increasingly more competitive global economy.