Regional Trade Agreements Research Articles

Barriers to Panel Composition in RTA Dispute Settlement: Evaluating Solutions to a Perennial Problem

AbstractIn the wake of the demise of the WTO's Appellate Body, there has been a growing trend of states resorting to the dispute settlement mechanisms under their regional trade agreements (RTAs) to resolve international trade disputes. While the vast majority of these mechanisms have never been used, many contain defective procedural provisions that are likely to slow down or completely derail the dispute settlement process should those provisions be invoked. This is particularly true of mechanisms that effectively permit a respondent to block or delay the composition of a panel to hear a dispute. This article examines the issues of ‘panel blocking’ and panel composition delay tactics in RTA dispute settlement with reference to both past and present practice, and provides a textual analysis of a cross-section of existing RTAs to identify procedural defects and prescribe solutions for ensuring timely panel composition in future disputes.

International cooperation analysis of Asian political distance network constructed using event data

Economic integration is underway in East Asia and the Asia-Pacific region, including the Association of Southeast Asian Nations (ASEAN) community-building process, with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) coming into effect in 2018 and the Regional Comprehensive Economic Partnership (RCEP) in 2022. While these Regional Trade Agreements (RTAs) have deepened multilateral relations, there is an insufficient mechanism to quantify multilateral diplomacy within the region. Therefore, this study analyzed the region from three perspectives: countries that have contributed to diplomacy for intra-regional cooperation (diplomatic ranking), the cohesiveness of countries in diplomatic stances (diplomatic clusters), and the synchronization period of cooperative events (diplomatic synchronization); and we quantified them by the ranking of diplomatic centrality, blockmodeling of the signed network, and analytic signal, respectively. For analysis, we used bilateral event data to create a political distance network consisting of the original East Asia Summit (EAS) member countries (ASEAN+6) and the United States for the period 1985–2020 and to define diplomatic centrality. Diplomatic ranking indicated three major trends: 1985–1992, 1993–2011, and 2012–2020. Until 1992, Japan, the ASEAN member states (AMS), and Australia ranked at the top, and from 1993 to 2011, Japan and China almost dominated the top. Since 2012, AMS have joined Japan and China in the top ranks. Diplomatic clusters showed the stances of Australia and New Zealand were closest. Throughout the 36 years, the stances of Japan and Republic of Korea were also closer, followed by China, AMS, and the United States. Diplomatic synchronization quantified the progress of regionalism in East Asia. Furthermore, diplomatic rankings in synchronous periods revealed the difference between the diplomatic positions of Japan and China in East Asia and illustrated that AMS were at the center of multilateral diplomacy in the region in 2018–2019.

American and Australian Tariff Policies: Do They Rock or Tango or Roll?

How can two countries’ trade policies be related to each other? A first possibility is that they are not related at all and that each country’s tariffs are defined under national considerations (the “rock” hypothesis). A second is that each country adapts its tariffs in reaction to what the other does (the “tango” hypothesis). A third is that both countries react to events happening in the rest of the world (the “roll” possibility). This paper examines the determinants of Australia’s and the US’ average tariff levels. Relying on historical data that cover a century (1904 to 2005), the three hypotheses are examined. The results indicate a strong long-run relation between the US and the Australian tariffs. Interrelations are also exhibited, with the US decisions influencing more strongly the Australian tariffs than the opposite. The results are important to assess the sustainability and stability of the regional trade agreements in the Pacific area.

Business Cycle Synchronization and Multilateral Trade Integration in the BRICS

Two decades have passed since the acronym BRIC was coined in 2001. The cooperation within the BRIC was formalized in 2009, and the BRIC expanded into BRICS after South Africa joined in 2010. To deepen economic cooperation within the BRICS, the progress of regional economic integration will affect the degree of business cycle synchronization within the region, which in turn will have an impact on the direction and magnitude of macroeconomic interdependence and growth spillovers among the regional partners. In this paper, we find inconclusive evidence of cross-country business cycle synchronization and trade integration in the BRICS. To investigate their potential for further multilateral trade integration, we combine data on international trade linkages with network methods to examine the multilateral trade system in the BRICS as an interdependent complex network. We map the topology of the BRICS multilateral trade network, and assess the extent of their multilateral trade integration. The policy implication is that to promote BRICS regional economic integration, there are two possible paths forward: the formation of regional trade agreement (RTA), and the adoption of central bank digital currency (CBDC).

The Changes and Impact of China’s Tariff Concession Policy in the Context of the Regional Comprehensive Economic Partnership Agreement

The COVID-19 outbreak and the Russia-Ukraine conflict are significant economic challenges for China. Meanwhile, the Regional Comprehensive Economic Partnership Agreement (RCEP) entered into force on 1 January 2022, establishing the world’s largest free trade zone with the world’s largest population, the most diverse mix of members, and the highest development potential for reviving China’s economy. The RCEP’s second chapter goes beyond current global and regional free trade agreements, stipulating tariff reductions and their methods, which have had a noticeable impact on member countries’ imports and exports. This study investigates the impact of RCEP tariff concessions on China’s imports and exports, as well as industry development, by examining the various types of tariff concessions and tax cuts available.

Conflict or Cooperation: A Survival Analysis of the Relationship between Regional Trade Agreements and Military Conflict

Abstract This paper examines the timing behind the decision of countries to enter into regional trade agreements or interstate military conflicts, considering these two potential actions as substitute strategies. Using bilateral data from 1950 to 2014, I employ survival analysis to examine the factors that determine the likelihood of two countries entering into a regional trade agreement or a military conflict at any point in time. Historical or recent wars are posited to raise the gains from trade and therefore increase the likelihood that two countries choose to join the same trade agreement. On the other side, the existence of a strong trade relationship may raise the opportunity cost of entering into a conflict; bilateral trade flows and common membership in a regional trade agreement are posited to impact the likelihood of conflict. Other explanatory variables that affect the likelihood of either a common trade agreement or a military conflict include economic size, measured as the product of and the difference in the two countries’ GDPs; level of development, measured as the product of and the difference in the two countries’ per-capita GDPs; geography, measured by distance, contiguity, landlocked status, and island status; institutional linkages, represented by a common language, a colonial relationship, or a common legal origin; and political variables, including WTO membership, democracy, military alliances, and being a major oil producer. Results show that economic, geographic, institutional, and political variables all influence the probability that two countries enter into a conflict or join the same regional trade agreement.

The Effect of Regional Trade Agreements on ASEAN Trade Flows

The total number of Regional Trade Agreement (RTA) has increased rapidly over the past 30 years, from 22 in 1990 to 308 in 2020. The association of Southeast Asian Nations (ASEAN) aimed to increase regional integration among members through ASEAN Free Trade Area (AFTA) that came into force in 1993 and broadened its regional integration started in 2005 through trade agreements with China, Japan, Korea, Australia, New Zealand, and India. This paper study the impact of 5 ASEAN RTAs simultaneously to get comprehensive results. The Hausman-Taylor estimator was used to overcome endogeneity problems in the gravity equation without dropping the time-invariant variables which become the advantage of this method. The results show that AFTA increases trade flows between members and promotes imports and exports to the rest of the world. ASEAN regional integration outside the region with six trade partners show positive effect to members and has a minimal negative effect to non-members globally.

FDI flow in Energy Sector among BCIM, BIMSTEC+1 and ASEAN+4 sub-regional alignments

FDI is the most dynamic component for boosting trade among different sub-regional blocs. It may be considered under Mode 3 of the GATS agreement. This study documents various restrictions under market access and national treatments under mode 3 as committed by different member countries, among three regional trading blocs to improving the energy sector. A large portion of trade is being facilitated through strong linkage between service trade and FDI flow among countries or regions. ASEAN countries among South East Asia played an important role in attracting foreign direct investments for the economic development and growth in Energy Sector. Trade barriers, particularly commitment barriers of importing country, have a strong negative impact on smooth flow of investments across regions. This research also reviews the purposes of FDI among regional countries and explores the deepest and strong relationships among regional members to explore a possible strategic relationship for formation of Regional Trade Agreement (RTA).

Challenges for Western Balkan Countries Regional Integration: the Case of North Macedonia

This paper aims to elaborate on the possibilities that increased regional integration initiatives can have in boosting mutual trade among the countries in the Western Balkans region, such as: creating a Regional Economic Area by 2023; the creation of a Common Regional Market based on EU rules in the period 2021-2024 and the initiative “Open Balkan” created between North Macedonia, Serbia, and Albania for enabling free movement of goods and free movement of workers. For our research, the gravity model of trade for North Macedonia covering the period 2005-2020 is applied. The influence of bilateral and regional trade agreements on the country’s trade is analyzed. The results have shown that for North Macedonia, CEFTA-2006 membership has higher significance for increasing trade when compared to the agreement signed with the EU and to the other bilateral free trade agreements signed with EFTA, Turkey, and Ukraine. This paper point out that deepening trade integration through different regional initiatives could have a positive influence on increasing mutual trade.

Role of the state in the process of international integration

In the process of international integration, it has been proved that the role of the State is increasingly clearly expressed and promoted with positive effects through the social function of influencing and interfering in the social life of the State responsibility, expressed through the formulation of an integration strategy and roadmap based on accurate awareness and forecast of opportunities and challenges of global peace and international integration, from which the State has adjusted, create favorable conditions for institutions, policies, and laws in the integration process; manage and regulate the economy, promote internal resources in combination with taking advantage of external resources; negotiating, signing and implementing international and regional economic and trade agreements and contracts, etc. However, there are still difficulties and challenges that require the State to pay attention to and remove. Especially, in a world that is always moving and changing rapidly and unpredictably like today, it is important to fully and deeply realize the impacts to promote The role of the state in the process of globalization and international integration is necessary, to take advantage of opportunities, overcome challenges, and fulfill the goals and tasks of the Vietnamese revolution.

Can Regional Trade Agreements Negatively Impact Primary Schooling?

Can Regional Trade Agreements Negatively Impact Primary Schooling?

Toward a new political democracy index: Construction, validation, and calculation for individual societies and types of society

AbstractThe article proposes a new composite index of political democracy. It first constructs, elaborates, and rationalizes a comprehensive democracy index composed of 20 indicators and covariates. It then describes data on the democracy indicators and their sources and properties, including their metrics and range or scale which it makes uniform and detailed for precision and discrimination in index computation and estimation. It reports the results of an empirical analysis. Preliminary statistical analyses test for validation and their results indicate that the democracy indicators and index have high validity and reliability and confirm that its dimensions express the same latent variable. Exploratory substantive analyses compute present absolute and standardized democracy indexes both for individual societies such as 36 OECD countries and for types of society, specifically varieties of modern capitalism. The findings indicate wide variations among both individual societies and types of society, notably that coordinated, welfare capitalism surpasses the other varieties of capitalism in liberal political democracy. The article seeks to contribute to a better conceptualization, representation, and measurement of democracy in relation to society and its types.Related ArticlesCollins, Stephen D. 2010. “Regional Trade Agreements and Democracy Promotion: Measuring the Influence of Democracy Requirements in Regional Trade Agreements.” Politics & Policy 38(4): 737–64. https://doi.org/10.1111/j.1747‐1346.2010.00256.x.Davidsson, Simon. 2020. “Modeling the Impact of a Model: The (Non)Relationship between China's Economic Rise and African Democracy.” Politics & Policy 48(5): 859–86. https://doi.org/10.1111/polp.12375.Pelizzo, Riccardo, and Zim Nwokora. 2018. “Party System Change and the Quality of Democracy in East Africa.” Politics & Policy 46(3): 505–28. https://doi.org/10.1111/polp.12255.

Southeast Asian catch-up through the convergence of trade structures

ABSTRACT Regional trade agreements are vigorously debated, especially since the effects of trade on economic development is uncertain. Since East Asian trade occurs mostly within the region, we examine how trade structures might affect economic growth and provide directionality. The role of export composition is known to affect the rate of growth of emerging economies depending on trade structure similarity. This paper analyses the role of export baskets in the economic growth of developing countries in Southeast Asia, and tests the hypothesis that similarity of export structures leads to economic catch-up by providing directionality. The empirical analysis uses export data of East Asian countries to measure the bilateral similarities in export structures between the past and the present trade structures of Southeast Asian countries and comparing them withNortheast Asian countries that became wealthier earlier and Southeast Asian countries that tend to be latecomers. We find that the similarity of export structure provides directionality based on the overall competitiveness of a country's export sectors. This study fills the previous research gap of structural change from the perspectives of catch-up and directionality, by analysing the linkage between export structure convergence and economic catch-up, and linkage between export structure diversification and path-dependence.

Exploring digital trade provisions in Regional Trade Agreements (RTAs) in times of crisis: India and Asia-Pacific countries

The advent of the coronavirus in early 2020 led to the severe shutdown of economic activities across the globe. The virus led to a pandemic affecting the physical facilitation of cross border merchandise trade. International trade is augmented with trade documentation and physical verification. Regional Trade Agreements (RTAs) as WTO plus agreements between countries have provided bilateral trade opportunities for participating countries. Due to the pandemic, several physical processes shifted to digital mode and people were forced to participate, giving a boost to the digital economy across the world. Developing and under-developed countries were left behind due to a lack of clarity on digital trade provisions in the present WTO framework. Though, RTAs provided much scope for interpreting the existing provisions with innovation for the current times. The present study explores the digital trade provisions in the RTAs and how the pandemic will further push inculcating provisions. The focus is on RTAs that exist in the Asia Pacific region, along with India's perspective. The study identifies the initial digital provisions and collaborations, and evaluates the scope of digital trade.

The Revised Enforcement Regulation (No 2021/167) and Some Possible Effects on EU Trade Disputes

The European Union has enacted revisions to its previous Enforcement Regulation. This overview will describe some of the main changes introduced by the amendments and their possible effects on trade disputes between the EU and its opposing party. The Revised Enforcement Regulation has filled some lacuna in the aftermath of the decapitation of the Appellate Body and has broadened the scope of the previous Enforcement Regulation. Areas such as services and intellectual property rights have now come into the Regulation’s ambit. The Revised Enforcement Regulation is a part of the EU’s ‘Carrot and Stick’ strategy, which seeks to promote the use of the Multiparty Interim Appeal Arbitration Arrangement (MPIA) rather than parties escaping their responsibilities in the aftermath of a Panel report by appealing into ‘the void’. The Regulation has also expanded towards bilateral and regional trade agreements, including where provisions of Trade and Sustainable Development (TSD) are at stake. This overview will also briefly discuss the compatibility of the Revised Regulation with the EU’s World Trade Organization (WTO) obligations. The fact that other Members may be incentivized to join a rational and alternative means of dispute resolution is a successful outcome in itself. Whether the Revised Enforcement Regulation will ever be used is another question altogether. The lesser need for its use may actually signify the success of its existence. EU, Trade, Revised Enforcement Regulation, Disputes, WTO, MPIA, Regulation 2021/167, Appellate Body, Panel, Article 25 DSU, Implementation And Retaliation, Suspension of Concessions, International Law, Bilateral Trade Agreements, TSD

The intra-industry trade dynamics in CEE countries: The role of trade agreements

This paper investigates the impact of regional trade agreements (RTAs) on the development of intra-industry trade (IIT) for eight Central and Eastern Europe countries (CEE) from 1997 to 2019. The aim of the paper is to compare and explain the possible heterogeneous impact of different RTAs on IIT across countries while controlling for differences in development levels between economic integration member states. Our analysis is based on country-product level data obtained from UN Comtrade. The main hypothesis of the paper is that the CEFTA and EU integration agreements have a highly positive effect on IIT in comparison with other RTAs. However, the scope of the impact varies across countries, primarily depending on the economic development asymmetries that are in this paper proxied by the GDP per capita. We developed and estimated an augmented structural gravity model using Pseudo-Poisson Maximum Likelihood Estimator. The main contribution of our paper is the inclusion of the FTA-economic development gap interaction term, which enabled us to enrich the empirical findings of the research. Our results show that the main hypothesis holds, but also that an increase in economic asymmetries between integration members negatively affects IIT, thus indicating potentially increasing trade adjustment costs for new member states of an integration. These results go in favor of EU pre-integration and post-integration policies that have the goal of diminishing the economic development gap between future and present integration members.

TAPED를 활용한 글로벌 디지털무역규범의 형성과 아시아-태평양 지역무역협정의 역할에 관한 연구

As digital trade negotiations have been stalemated at the multilateral level, major countries started to utilize regional trade agreements to establish new and innovative trade rules in the digital era. Using ‘Trade Agreements Provisions on Electronic-commerce and Data (TAPED)’, this paper finds out that the Asia-Pacific (AP) region plays a positive and leading role in shaping global digital trade rules. In each five categories, such as ‘General and Dispute Settlement’, ‘Digital Trade Facilitation’, ‘Digital Trade Regulatory Frameworks and Digital Trust Policies’, ‘Reducing Digital Trade Barriers’, ‘Innovative Technology, Digital Development and Inclusion, and Institutional Coordination’, AP regional trade agreements contain more diverse rules and superior in quantity to American or European ones. The AP region, which was marginalized in the process of shaping traditional trade rules, now leads global negotiations on the new trade agenda. To see a new global trade regime in the digital era, it is crucial to keep a close eye on Asia-Pacific.

The Low Use by Firms of ASEAN Trade Preferences: Will RCEP Follow the Same Destiny? An Agenda for Rescue to Reform Rules of Origin in the Asian and Pacific Region

The Association of Southeast Asian Nations (ASEAN) rules of origin (RoO) evolved from the original inception in early ’90 to the later formulation in the ASEAN Trade in Goods Agreement (ATIGA) in 2009. Even after the completion of ATIGA, RoO reform has remained high in the agenda of ASEAN Economic Community resulting in more than thirty years of efforts to improve RoO. In spite of repeated research findings of low utilization rates of ASEAN trade preferences by firms, the ASEAN negotiating machinery has been unable to address the main cause of such low utilization, i.e., the shortcomings of ASEAN RoO and their cumbersome administration by ASEAN Member States The region has recently embarked in the Regional Comprehensive Economic Partnership (RCEP) that has been branded as a solution to the panoply of proliferating sets of RoO existing in Asia and the Pacific. Yet recent research and findings from firms indicated that RCEP has inherited many of the shortcomings of ASEAN rules of origin. An ASEAN Secretariat study of 2021 shows an average utilization rate of ATIGA trade preferences of 50%. This does not bode well for RCEP, unless action is undertaken. This article argues that it is time that Governments of Asia and the Pacific region act on an overdue reform of rules of origin to create a stable and predictable trade facilitating environment. rules of origin, regional trade agreements, trade preferences, utilization rates, ASEAN regional integration

Harmonisation Between Trade Liberalisation and Environmental Protection – A Long Way to Go? An Analysis of Vietnam’s Debris Importation Control in Light of WTO and CPTPP Rules

Abstract As in many other countries, Vietnam’s integration into the international trade system has accelerated since its participation in the WTO and regional trade agreements. However, widening market access – the consequence of this integration process – risks exacerbating some of Vietnam’s existing environmental problems. In this context, the Vietnamese government is adopting measures in order to mitigate negative impacts of trade on the environment, but do these measures risk violating Vietnam’s international trade commitments? Can the environmental protection provisions of new generation free trade agreements like CPTPP be a reliable legal basis to justify Vietnamese trade restriction measures? The author will analyse these questions, while focusing on the case of debris importation control – an issue that has been attracting a lot of public attention in Vietnam and in South East Asia in recent years.

Policy challenges and testing the scope for regional trade integration – a case of South Asia

Purpose The paper presents the facts on the policy challenges and opportunities in the way forward of trade and economic co-operation in South Asia amid the coronavirus disease 2019, which comes to be the least economically integrated region worldwide. Due to tense geopolitics in South Asia, trade is heavily biased toward extra-regional markets despite of existing regional trade agreements (TAs) in the region.Design/methodology/approach Having tested the stationarity of data with structural break, the paper uses intra-regional trade in addition to other domestic economic variables as exogenous regressors in autoregressive distributed lag multivariate framework, hence raising the quality of statistical inference.Findings This paper highlights that intra-regional trade significantly affects the economic welfare as measured by Gross Domestic Product per capita of the people from the region, hence raising the need for higher regional trade openness. If trade barriers are overcome, all the South Asian countries will gain through effective implementation of regional TAs.Research limitations/implications The study relies on the multivariate technique with regional trade share as the main exogenous variable. In addition, the regulatory and economic conditions of all countries are different which also tends to affect the mutual degree of trade relations.Practical implications Over the economic reasons, the manmade barriers owing to political differences are the root cause for the low intra-regional trade. Amid the pandemic, South Asian courtiers have the high time to leverage the bilateral trade for mutual benefits. India being the largest economy can play a decisive role in pushing forward the regional trade bloc – South Asian Association for Regional Cooperation (SAARC) – for achieving its objective through multilateral engagements in a wider perspective.Originality/value The present study makes pioneer efforts to examine the dynamic linkages between regional trade and economic growth. The results provide new insight into the dynamics of benefits driven by trade interdependency.