Free Trade Agreement Research Articles

Article: Waking the Sleeping Lion: The China-Ecuador FTA and Its Implications

This paper examines the Ecuador-China Free Trade Agreement (FTA) and its broader implications for Ecuador’s economy. It discusses the context in which Ecuador pursued the FTA, highlighting the competitive pressures from neighbouring countries like Peru and Colombia, which had already secured similar agreements. The analysis includes a comparison between the Ecuador-China and Peru China FTAs, focusing on key aspects such as tariff classification, rules of origin, and customs regulations. The paper also explores the potential economic benefits for Ecuador, including market access for its export products and the expected impacts on sensitive sectors. However, it raises concerns regarding the flexibility and potential risks associated with the agreement, such as undervaluation of Chinese goods and the challenges of maintaining competitiveness within the Andean Community (CAN). The paper concludes by questioning whether the FTA will deliver the anticipated economic growth and whether it sets a precedent for future trade negotiations within the region.

Trade as a commerical determinant of health: The health impact of a free trade agreement on Wales

Abstract As a result of the UK’s withdrawal from the European Union (‘Brexit’), the UK can negotiate its own trade agreements for the first time in over 40 years. This includes the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP). Public Health Wales undertook a mixed-method Health Impact Assessment (HIA) to assess the potential impact of the CPTPP on health, well-being and inequalities in Wales. It is only the second ever HIA carried out on a free trade agreement (FTA) globally. A literature review on the potential impact of the CPTPP on health was conducted. Qualitative interviews with cross-sectoral representation, such as the environment, were undertaken alongside the development of a community health and demographic profile. The HIA identified significant potential impacts across health determinants, e.g., employment, agricultural production and health care, as well as impacts on population groups, e.g., those on low incomes. The Investor State Dispute Settlement (ISDS) mechanism, economic uncertainty and loss of regulatory alignment were identified as potential pathways for health impacts to affect the population. The HIA highlighted trade as a key commercial determinant of health. The findings have been beneficial in informing policy and decision-makers to prepare for the implementation of the CPTPP and take action to maximise opportunities and prevent potential negative impacts. Communicating HIA evidence that links trade to health has also led to valuable cross-sector and cross-UK engagement and sparked a “rethinking” of trade through a well-being economy lens where health, well-being and sustainability are primary objectives. This work has demonstrated the value of a HIA approach to FTAs by mobilising a range of evidence through a transparent process, resulting in transferrable learning for others as well providing an entry point for public health to have direct engagement with trade negotiators and those participating in trade discussions. Key messages • Trade agreements are a key commercial determinant of health across health behaviour, policy and economy. • Multiple population groups are affected by trade agreements both positively and negatively.

The window of opportunity: a case study of the battery electric vehicle in Thailand

Purpose Thailand, although a late entrant, has emerged as a significant center for the production and export of internal combustion engine (ICE) vehicles in Asia. With the arrival of a disruptive battery-electric vehicle (BEV), this study aims to investigate whether Thailand can exploit this window of opportunity to leapfrog. Design/methodology/approach This paper uses data sourced from Thailand’s Department of Intellectual Property to analyze electric vehicle (EV) patent applications. This paper collected qualitative data and conducted interviews with several EV manufacturers. Findings Although Japanese automakers dominate essential EV technology patents, they trail behind Chinese automakers, which benefited from the Free Trade Agreement (FTA) in EV sales. The incumbents, Japanese and Western, choose to expand their production of hybrid electric vehicles (HEVs) and plug-in hybrid vehicles. ICE technology does not constrain new entrants, such as Chinese automakers, Japanese newcomers and Thai newcomers. Compared to Japanese carmakers stuck with ICE and HEV technologies, they have been transitioning to BEVs at a faster pace. BEV has opened the door for large Thai indigenous energy corporations to enter the automotive industry by focusing on niche areas (nonfour-wheel vehicles) and supporting businesses like charging stations. In summary, Thailand has successfully attracted foreign direct investment (FDI) into the EV sector, but it has not yet succeeded in developing indigenous technologies related to EVs. The Thai automobile sector fails to leapfrog because it is too tied up with Japanese automotive production networks and has an unfavorable FTA with China. Originality/value This study sheds light on the limitations of an industrial development strategy relying on openness to trade and FDI without adequately strengthening indigenous technologies and firms, as the country adopting the strategy fails to leapfrog when the window of opportunities created by disruptive technologies arrives.

Assessment of the Current Situation and Solutions to Attract Australian FDI Capital to Vietnam in the Context of International Integration

Foreign Direct Investment (FDI) has played a pivotal role in Vietnam’s economic transformation, significantly contributing to industrialization, job creation, and export growth. Since the introduction of the Law on Foreign Investment in 1987 and Vietnam’s accession to the World Trade Organization (WTO) in 2007, the country has emerged as a leading destination for foreign investors in Southeast Asia. Key sectors attracting FDI include manufacturing, real estate, and services, which have driven economic development and facilitated Vietnam’s integration into the global economy. Despite these successes, challenges remain that hinder FDI’s full potential, including administrative inefficiencies, complex regulations, corruption, and inadequate infrastructure. The shortage of highly skilled labor, especially in technology-driven fields, also limits the country's ability to attract higher-value FDI projects. Moreover, there are regional disparities in FDI distribution, with major urban centers like Ho Chi Minh City and Hanoi receiving most investments, while rural areas are often overlooked. The impact of new-generation Free Trade Agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), is also examined. These agreements enhance market access, legal protections for investors, and reduce trade barriers, making Vietnam increasingly attractive for high-tech and service industries. This paper assesses the current FDI landscape in Vietnam, identifying opportunities and challenges for foreign investors. Recommendations include simplifying business procedures, implementing anti-corruption measures, improving infrastructure, and enhancing workforce training to address skills gaps. By adopting these reforms, Vietnam can attract higher-quality investments, strengthen ties with global supply chains, and foster sustainable economic growth. Additionally, the research emphasizes the importance of building stronger partnerships between FDI enterprises and local firms to ensure the widespread distribution of investment benefits across the economy. With a more favorable investment climate, Vietnam can reinforce its position as a premier destination for global investors and enhance its role in the international market.

Assessing the impact of the European Union-Vietnam free trade agreement on labor market and employment in Vietnam

PurposeThis study investigates the impact of the European Union-Vietnam Free Trade Agreement (EVFTA) on Vietnam’s labor market and employment outcomes, considering the potential distributional consequences across various groups of workers and regions.Design/methodology/approachA comprehensive quantitative framework is employed, combining the gravity model of trade to estimate the EVFTA’s effects on trade flows, the CISAF_M1 model to simulate sectoral employment impacts and econometric models to analyze the effects on wages and decent work. The analysis draws upon a rich dataset spanning the period before and after the EVFTA’s implementation.FindingsThe EVFTA has significantly boosted Vietnam’s exports to the EU, leading to substantial job creation in labor-intensive sectors such as textiles, apparel and footwear. The agreement has also contributed to wage growth and improved access to social insurance for workers in export-oriented industries. However, the impact on other aspects of job quality is less clear. The distributional analysis reveals that the EVFTA’s employment effects have been relatively balanced across gender but have favored younger and less skilled workers as well as those in rural areas.Originality/valueThis study provides a comprehensive and nuanced assessment of the EVFTA’s impact on Vietnam’s labor market, addressing a gap in the literature on the employment effects of new-generation free trade agreements in developing countries. The findings highlight the importance of considering distributional aspects when evaluating the socioeconomic implications of trade liberalization and offer valuable insights for policymakers aiming to promote inclusive growth in the context of deepening international economic integration.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2024-0236

Public attitudes towards international trade and free trade agreements in the United Kingdom

Public attitudes towards international trade and free trade agreements in the United Kingdom

Amendments to Vietnam Labor Law after Two Years of Implementing European-Vietnam Free Trade Agreement

The article presents the labor policy commitments in the Free Trade Agreement between Vietnam and the European Union (EVFTA), analyzes the progress in amending the law related to Vietnamese labor according to the signed commitments, identify limitations and propose some solutions for effectively implementing the commitments in the EVFTA Agreement.

Exploring the effects of rules of origin and tariff margins on China's export enterprise under the China–Korea Free Trade Agreement

This study explores the effects of rules of origin (ROOs) and tariff margin on China's export enterprise using Poisson pseudo‐maximum likelihood estimation and logit models with product‐level data under the China–Korea Free Trade Agreement (CKFTA). The findings reveal that increased ROOs have a negative effect on export value and enterprises' CKFTA use, while tariff margin is positively associated with export value. The estimation results examining export value also demonstrate that the effect of ROO is larger than that of tariff margin (in absolute terms); however, those concerning CKFTA use are the opposite. The study proposes suggestions for reducing enterprises' costs to promote trade and economic development between China and South Korea under the CKFTA based on the results.

Analysis of Regional Economic Cooperation in Asia and Policy Options for China

Recent years have witnessed a robust growth momentum in regional economic cooperation in Asia, marking it as an indispensable component of global economic development. With the acceleration of globalization and the deepening of regional integration, cooperation among Asian nations in areas such as trade, investment, and infrastructure has progressively intensified. Particularly under China's impetus, the signing of free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) signifies a new phase in Asia's regional economic cooperation. As the world's second-largest economy, China, with its vast market and vigorous economic growth, plays an increasingly pivotal role in regional economic collaboration. China's policy choices not only influence the sustainable development of its own economy but also have a profound impact on the entire economic landscape of Asia. Therefore, a thorough investigation of the current state, mechanisms, and characteristics of regional economic cooperation in Asia, along with an analysis of China's policy choices in this process, holds significant theoretical and practical importance.

Tariff Negotiations Under Free Trade Agreements: The Case of Mongolia and the Republic of Korea

One of the principal reasons for the establishment of Free Trade Agreements (FTAs) between countries is to negotiate the reciprocal reduction and/or elimination of customs tariffs. According to Mongolian law, the Customs General Administration of Mongolia (CGAM) is responsible for determining the optimal rate and amounts of customs duties. As such, it plays a leading role in the negotiation of tariffs and the implementation of FTAs with partner countries. This paper examines the legal text of tariff negotiations and the modality of reducing tariffs, and determines specific goods of interest for tariff negotiations within the framework of the agreement between Mongolia and the Republic of Korea (ROK), based on analysis of the revealed comparative advantage (RCA) index. The results of the analysis show that, during the negotiation process, Mongolia should focus on textiles and apparel, as well as agricultural production, while the ROK should concentrate on automobiles, items of machinery and their parts, tobacco, cosmetics and noodles. This study should prove useful to Mongolian Customs experts and tariff negotiation team members, trade policy makers and domestic producers.

Corporate Social Responsibility on Labour under the European Union - Vietnam Free Trade Agreement and Policy Implications for Vietnam

The article provides an in-depth understanding of the commitment to corporate social responsibility (CSR) on labour under the new generation of free trade agreements (FTAs) of the European Union (EU) in general and the Vietnam - EU Free Trade Agreement (EVFTA) in particular. Accordingly, this article clarifies the evolution of CSR commitments in the EU's new generation of FTAs via the EU's foreign and trade policies. On that premise, the article conducts a comprehensive examination of the nature of CSR commitments related to labour in EVFTA. The article also examines current legislation of the EU and its member states. Then, it proposes a variety of policy implications for Vietnam and other developing nations to implement CSR commitments in the context of global sustainable development.

The Impact of Implementing The African Free Trade Agreement on Agricultural Foreign Trade between Egypt and The Most Important African Countries

The Impact of Implementing The African Free Trade Agreement on Agricultural Foreign Trade between Egypt and The Most Important African Countries

Asymmetric Free Trade Agreements and Misalignment of Incentives: Lessons From the European Union–Turkey Customs Union

AbstractUnder the European Union (EU)–Turkey customs union, the EU can negotiate free trade agreements (FTAs) with third countries without Turkey's involvement. Simultaneously, Turkey is required to apply the same external tariffs and standards and negotiate its own FTAs in line with the EU. This leads to asymmetries and misalignment of incentives in Turkey's trade relationships. This study utilizes the peculiar nature of this arrangement to explore the asymmetric FTAs and their effects on Turkey and the Union. We find no effect of asymmetric FTAs on Turkish trade. This finding can be explained partially by evidence that Turkish compliance with EU tariffs is low for asymmetric FTAs. This is especially the case for the goods category in which Turkey specializes, and the divergence extends to at least 10 years after the EU signs an asymmetric FTA. As customs unions require that external trade policy be symmetric across all members for them to function optimally, this divergence in tariffs between Turkey and the EU needs to be addressed by removing the misalignment of incentives.

Increased Competitiveness of Indonesia's Rubber Rubber Exports After The Enactment of ACFTA (Asean-China Free Trade Agreement)

The ASEAN-China Free Trade Agreement (ACFTA), which came into effect in January 2010, aims to increase economic cooperation and remove trade barriers. However, the value of Indonesia's rubber exports decreased significantly after the implementation of this agreement. This study uses the gravity model and Revealed Trade Advantage (RCTA) method to analyze the factors affecting the decline in the value of Indonesia's rubber exports. The data used covers the period 2001-2022 and is taken from various sources including TradeMap and interviews with rubber exporters. Findings show that the value of Indonesia's rubber exports to China and ASEAN countries has fluctuated, with a significant decline after 2011. Gravity model analysis shows that ASEAN-China real GDP growth is negatively related to the value of Indonesian rubber exports, while other factors such as exchange rates and commodity prices also play a role. The decline in Indonesia's rubber export competitiveness is not only caused by the implementation of ACFTA, but also by internal factors such as low productivity and underinvestment. Recommendations are given for commodity price adjustments to improve Indonesia's rubber export competitiveness.

Investigating the factors affecting outward FDI of Vietnam: Does political index matter?

Considering the important role of foreign direct investment (FDI) in economic growth and integration, this paper seeks to thoroughly analyze the outward FDI pattern of Vietnam to its 15 major FDI recipients (accounting for approximately 94% of Vietnam's OFDI) using the gravity theory and a robust panel data approach for the comprehensive annual data over the period of 2007 – 2022. By determining the main destinations of Vietnam’s Outward FDI through the creation of social, economic, and political indices via the principle component analysis (PCA), the empirical results conclusively prove the positive impacts of the political index, social index, the existence of a common border, and accession to the WTO on the Vietnamese OFDI volume, while geographical distance is found to negatively impact the flow. As the main practical policy implications, issuing policies for sustainable economic growth, creating the novel strategy of FDI neighborhood policy, and fostering regionalism through FTAs (Free Trade agreements) are highly recommended.

Sustainable development goals implementation in a post‐colonial African State: Any future for the African Continental Free Trade Area?

AbstractThis paper examined the prospect of the African Continental Free Trade Agreement in the context of the SDGs. It took its bearing from the contemporary structure of most African states, arguing that the reality of the continent's postcolonial condition could impede the implementation of the AfCFTA. Its refrain is that studies on how Nigeria and South Africa, as regional powers, have used their economic and political influence to advance the SDGs' implementation throughout Africa, using different South–South development frameworks are few. In other words, the institutionalization of a strategic collaboration agenda through a Nigeria‐South Africa‐coordinated African response to the new powers, in the area of timely implementation of the SDGs is lacking. This study affirms that for the AfCFTA to be successful, it is incumbent on the regional hegemons to build a suitable institutional framework and governance structure that upholds the rule of law and encourages harmonization, consistency, and predictability.

Towards the Corporate Social Responsibility on Labour in the Era of New-Generation Free Trade Agreements: The Case of EVFTA

The article gives an in-depth understanding of the commitment to corporate social responsibility (CSR) on labour under the new generation of free trade agreements (FTAs) of the European Union (EU), and especially, the EU – Vietnam Free Trade Agreement (EVFTA). Following that, via the EU’s foreign and trade policies, this research clarifies the history as well as the evolution of the CSR commitments in the EU’s new generation FTAs. On that basis, this article also delves into the nature of CSR commitments related to labour in the EVFTA. Last but not least, the article reviews the current legislation of the EU and its member states as partners and suggests different policy implications that Vietnam and other developing nations might adopt to execute their CSR commitments in the context of global sustainable development.

The rise of data property rights in China: how does it compare with the EU data act and what does it mean for digital trade with China?

Abstract In 2022, China introduced a landmark Data Property Rights System, followed by implementation rules in 2023 and 2024. Concurrently, the EU enacted the groundbreaking Data Act. While both systems oppose granting exclusive data access rights, they differ in their approaches: China establishes new property rights for data processors, while the EU imposes obligations on them. By comparing China’s Data Property Rights System with the EU Data Act, this paper aims to elucidate the background, contents, and challenges of the Data Property Rights System in the context of digital trade. It argues that China will address the dilemmas of security risks versus data commercialization by implementing a national negative list for data outflows, qualified by green channels in selected industries. It urges China to adopt a more consistent national approach in implementing Data Intellectual Property Rights, resolve the classification and non-discrimination treatment issues in international trade, and draw lessons from the EU sui generis right. It also suggests that focusing on sharing non-personal data under the China Data Property Right System and the EU Data Act may reshape our understanding of governing non-personal data flows and non-consumer users of data products in Free Trade Agreements.

Clive Palmer’s claims against Australia for billions renew pressure to remove investor rights to sue governments from trade agreements

Abstract The Australian debate over Investor-State Dispute Settlement (ISDS) sharpened in 2023 because Australian mining billionaire Clive Palmer, having previously registered his mining company in Singapore, has claimed to be a Singaporean investor. He is using ISDS provisions in the 2012 ASEAN-Australia-New Zealand Free Trade Agreement and the amended 2017 Singapore-Australia Free Trade Agreement to sue the Australian government for a total of A$410 billion in three separate claims. This article uses Cox’s critical theory framework developed by Schneiderman to explain the historical development and power dynamics of ISDS, the contest between its business supporters and social movement critics, and the impact of this contest on governments. It then analyses the Palmer claims and explores the global debate about ISDS, including its increased use by fossil fuel companies against government regulation of carbon emissions, which has led to increased resistance from social movements and governments. ISDS is also being reviewed by the United Nations and World Bank institutions which provide arbitrators for its tribunals and by the Organisation for Economic Co-operation and Development. The conclusion assesses the debate over whether ISDS can be reformed and its future viability.

The Impact of Utilization Free Trade Agreements (FTA) and Fiscal Facilities KITE-IKM on the Export Performance of Small and Medium Enterprises (SMEs)

The Impact of Utilization Free Trade Agreements (FTA) and Fiscal Facilities KITE-IKM on the Export Performance of Small and Medium Enterprises (SMEs)