Share Of Intraregional Trade Research Articles

An analysis of intra-SAARC trade relations

The world is composed of geographical regions comprising clusters of countries having physical contiguity. This premise motivated South Asian countries to form SAARC in 1985. SAARC envisioned enhancing trade and commerce among the member states. In 1993, they initiated SAPTA to liberalise tariff barriers and created SAFTA in 2004 to make South Asia a trading zone. Despite these initiatives, many pitfalls and hiccups did not allow SAPTA and SAFTA to bloom. This paper attempts to empirically examine intra-regional trade among SAARC countries through their bilateral trade intensity index, intra-regional trade intensity index and intra-regional trade share. The study found that most SAARC countries have their trade priorities outside the region. Their intra-regional trade stands at just 5.8%. To reduce this economic disconnect, SAARC countries need to come forward to enhance cross border trade, for which an open and more inclusive trading system and political will is required.

Can regional trade integration facilitate renewable energy transition to ensure energy sustainability in South Asia?

This paper primarily aimed to assess the impacts of regional trade integration on the prospects of undergoing renewable energy transition in selected South Asian economies between 1992 and 2015. The overall results from the econometric analyses, controlling for the cross-sectional dependency and slope heterogeneity issues, highlight the importance of promoting intra-regional trade among the South Asian economies to boost the renewable energy consumption shares and renewable electricity output shares in the total final energy consumption and aggregate electricity output figures, respectively. Besides, the non-linearity of the nexuses between intra-regional trade shares and renewable energy consumption shares and between intra-regional trade shares and renewable electricity output shares are also ascertained. The threshold intra-regional trade shares concerning the renewable energy consumption and renewable electricity output shares are predicted at 20.53% and 17.50%, respectively. However, the predicted threholds are significantly higher than the current average intra-regional trade share in South Asia. Moreover, the panel causality analysis reveals unidirectional causal relationships stemming from intra-regional trade shares to renewable energy consumption and renewable electricity output shares. Besides, greater FDI inflows are found to reduce the overall use of renewable energy while higher levels of economic growth and CO2 emissions are found to catalyze renewable energy use in South Asia. Furthermore, the results also implicate a non-linear U-shaped association between positive crude oil price shocks and renewable energy consumption and renewable electricity output shares. Therefore, these findings impose critically important policy implications for liberalizing the intra-regional trade barriers, reducing dirty foreign direct investment inflows, expediting economic growth, reducing fossil fuel dependency and abating carbon dioxide emissions to facilitate renewable energy transition in South Asia.

Integration and the Diplomatic Crisis: Current Realities of the GCC

The article analyzes the integration process in the Gulf Cooperation Council group countries (GCC), which was founded in 1981. Regional economic integration in the GCC has passed through the several traditional stages: the Free trade zone, the Customs Union and the Common market. Certain exceptions remain in the GCC integration, but the countries aim to create a full economic Union by 2025. Currently, the GCC is one of the most advanced and successful integration associations in developing countries. However, the GCC is the only truly functioning integration bloc in the MENA region. The author's analysis confirms that the share of intraregional trade is growing in the GCC, but this share is less high than in other integration blocs. The author emphasizes that the GCC countries have significant success in the world market of goods and capital. The GCC trade turnover is growing steadily, although it depends on fluctuations in world oil prices. The GCC region attracts a lot of foreign investment and technology. This allows them to continue to diversify their national economies. The level and quality of life in the GCC is improving. These and other achievements are largely the result of regional economic integration and cooperation between countries in various areas on the world and regional markets. At the same time, the GCC is one of the most strategically important regions in the world economy and politics. Economic and political processes are influenced by many factors, both internal and external. Therefore, there are many contradictions in the GCC, and sometimes crisis situations are formed. One of them is the current "diplomatic crisis". It began in 2017 and has so far created numerous problems in the region and in the Arab world as a whole. It also has a negative impact on the development and deepening of integration processes. The author analyzed statistical data for 2009-2018 and justified the conclusion that the "diplomatic crisis" damages intraregional trade, reduces the dynamics of macroeconomic indicators, and worsens the position of the GCC countries in the world market of goods and capital. It also creates difficulties for citizens of GCC countries and companies that operate in the region. Now GCC countries should develop a mechanism to de-escalate the crisis, as this is in the economic and political interests of all participants and the Middle East as a whole. The relevance of the research is due to the need to analyze regional economic integration processes in the subregion in the context of growing global instability. The research makes a significant contribution to understanding the nature and features of integration processes in the Middle East.

Economic Integration in the Maghreb

Individual countries of the Maghreb have achieved substantial progress on trade, but, as a region they remain the least integrated in the world. The share of intraregional trade is less than 5 percent of their total trade, substantially lower than in all other regional trading blocs around the world. Geopolitical considerations and restrictive economic policies have stifled regional integration. Economic policies have been guided by country-level considerations, with little attention to the region, and are not coordinated. Restrictions on trade and capital flows remain substantial and constrain regional integration for the private sector.

Trade integration in Asia: Trends and determinants

While economic nationalism is mounting over the globalization around the western world in recent years, Asia’s external trade and the economies overall is growing faster than in other regions shifting the center of gravity of the world economy from the West to the East. However, it is unclear how Asian economies are integrating within the region. Using the dynamic panel data approach, particularly the generalized method of moments (GMM) estimator, on the cross-country panel data of 34 Asian countries for the period of 1990-2015 this study examines the trend and the determinants of regional trade integration in Asia. The results show fast-growing intra-regional and overall trade for most of the countries in the region. It also finds a significant positive effect of economy’s size and access to mobile phone on the total trade and intra-regional trade volume. Similarly, mobile phone concentration and urbanization rates have a significant positive effect on both intra-Asian trade volume and its share in the total trade. However, the size of an economy has no significant effect on intra-regional trade share. The finding suggests that further liberalization of trade together with policies boosting domestic/regional demand are helpful for broader regional integration in Asia.

Political Economy of Regional Integration: The Northeast Asian Model Revisited

ABSTRACTIt is found that the intra-regional trade share or functional integration plays an important role in the institutionalization of regional integration not only in the European Union (EU) but also in Northeast Asia. The crisis factor, which is measured by the regional economic growth rates, is empirically significant in Northeast Asia but not in the EU. This situation confirms the crisis model for Northeast Asia that emphasizes the stimulating role of crisis for the institutionalization of regional integration. However, the political leadership factor is not empirically significant in Northeast Asia and in the EU, and this finding does not support the political leadership model that emphasizes the facilitating role of political leadership for the institutionalization of regional integration.

The Impact of Trade Liberalization in Africa

Africa is one of the most economic-integrated continents by a number of regional trade agreements in the continent. There are about 30 bilateral and multilateral trade agreements within the continents so that each African country is a member of at least one regional trade agreement. Trade between African countries, however, barely exceeds 10% of the total trade of Africa, which is much lower than other continents' intra-regional trade share. This discrepancy between many regional trade agreements and small intra-continent trade share tells that regional economic integrations in Africa are very unsuccessful trade liberalization policies to promote trade. This paper examines a reason why trade liberalization policies in Africa fail. In particular, we investigate the impact of trade agreements in Africa on trade conditional on financial market development and political instability. An empirical study finds that Africa countries' poor financial market accessibility and political instability are key barriers to trade integration in the region. These two factors can explain most disadvantage of African countries in their intra-regional trade. In a dynamic regression, the two factors depress the long-run growth of trade due to trade liberalization in the region significantly, while African continent dummy variable that captures other unobserved trade obstacles in the region has much less effect on trade compared to the literature on African regional economic integration.

Intra-regional trade of ASEAN+3: Trends and issues for the economic integration of East Asia

This paper examined the structures and characteristics of ASEAN+3 intra-regional trade through an analysis of intra-regional trade share, the intra-regional trade intensity index, and the regional trade introversion index in terms of primary goods, intermediate goods, and final goods. We could see that the economic integration of ASEAN+3 would be enlarged and deepened through the progress and advancement of intra-regional trade. However, we found that although the volume and share of intra-regional trade has been growing, this may not indicate or guarantee the inherent advancement of the economic integration of the region. In particular, since the global financial economic crisis in 2008–2009 the introversion of the EU and NAFTA has grown, while that of ASEAN+3 has reduced. In this respect, it would be vital to make and practice innovative plans to develop intra-regional trade so that the foundation of the FTA among ASEAN+3 countries could be the catalyst for substantial development of intra-regional trade. Furthermore, in order for intra-regional trade to continue to develop, a more comprehensive and higher level of intra-regional economic integration is required. This can be realized through regulation, specific plans, and practical effort. Finally, to maximize the effect of intra-regional trade liberalization this needs to go beyond the boundary of intermediate goods and expand into final goods, especially consumption goods.

Asian Trade Flows: Trends, Patterns and Projections

This paper provides trade flow projections for major Asian developing economies (ADEs) for the next two decades against the backdrop of an in-depth analysis of policy shifts and trade patterns over the past 4 decades. Merchandise trade of ADEs has grown at a much faster rate in the global context, with a distinct intraregional bias. Global production sharing has become a unique feature of the economic landscape of the region, with the People’s Republic of China playing a pivotal complementary role as the premier assembly center within the regional production networks. According to the projections made within the standard gravity modeling framework, total real nonoil trade of ADEs would increase at an average annual rate of 8.2 during the next two decades, with a notable convergence of individual countries’ rates to the regional average. The share of intraregional trade in total nonoil trade would increase steadily from 53% in 2010 to 58% in 2030. The trade-to-GDP ratio would increase from 39.4% and 74.4% between these 2 years. These predictions need to be treated with caution as they are based on the assumption that the trade structure pertaining to the estimation period will remain unchanged in the next 2 decades.

Eastphalia: building a security community in eastasia

Globalization has had a significant on the dynamics of trade. Moreover, these effects have also brought with it negative externalities that exacerbate a country’s propensity towards conflict. Countries today face new threats to security that were not included in a traditional security matrix: piracy, smuggling, transnational criminal organizations, cyber-attacks, terrorism, and ethnic/religious movements. Moreover, there are natural threats such as epidemics, climate change, and natural disasters. These threats all require greater cooperation among countries in a region. One mechanism that creates a pathway for a greater level of cooperation is through regional economic integration. The second half of the twentieth century was characterized by unprecedented progress towards global and regional integration. As a result regional institutions have been established to capture the network effect of economic integration as a means for greater cooperation on traditional and non-traditional security threats. Increasing economic interdependence, as a consequence of globalization, means that countries no longer find themselves in a zero-sum world. While much focus has been given to the link between economic interdependence and conflict, less has been given to the processes. The purpose of this paper is to explore the link between economic integration and conflict. Using intraregional trade share as a proxy measure for economic integration, regression analysis is conducted to examine this relationship among 31 countries in East and Southeast Asia. The quantitative analysis is followed by case study of ASEAN to lend support to the analysis and to explore the practicalities of building a security community in East Asia examining ASEAN’s capabilities for dealing with traditional security challenges, specifically, inter-state conflict.

Asian trade flows: Trends, patterns and prospects

Over the past four decades merchandise trade of developing Asian economies (DAEs) has grown at a much faster rate than growth in world trade, with a distinct intra-regional bias. Global production sharing has become a unique feature of the region's economic landscape, with China playing a pivotal complementary role as the premier assembly centre within regional production networks. According to the projections made using the standard gravity model of international trade, total real non-oil trade of DAEs would increase at an annual rate of 8.2 percent during the next three decades, with a notable convergence of individual countries’ rates to the regional average. The share of intra-regional trade in total nonoil trade would increase steadily from 53 percent in 2010 to 58 percent in 2030. The trade-to-GDP ratio would increase from 39.4 percent and 74.4 percent between these two years.

Asian Trade Flows: Trends, Patterns, and Projections

This paper provides trade flow projections for major Asian developing economies (ADEs) for the next two decades against the backdrop of an in-depth analysis of policy shifts and trade patterns over the past 4 decades. Merchandise trade of ADEs has grown at a much faster rate in the global context, with a distinct intraregional bias. Global production sharing has become a unique feature of the economic landscape of the region, with the People's Republic of China playing a pivotal complementary role as the premier assembly center within the regional production networks. According to the projections made within the standard gravity modeling framework, total real nonoil trade of ADEs would increase at an average annual rate of 8.2 during the next two decades, with a notable convergence of individual countries' rates to the regional average. The share of intraregional trade in total nonoil trade would increase steadily from 53% in 2010 to 58% in 2030. The trade-to-GDP ratio would increase from 39.4% and 74.4% between these 2 years. These predictions need to be treated with caution as they are based on the assumption that the trade structure pertaining to the estimation period will remain unchanged in the next 2 decades.

The South Asian Free Trade Agreement

The South Asian Free Trade Agreement (SAFTA), due to have been implemented starting July 2006, has adopted a negative list approach permitting member countries to potentially exclude a substantial share of intraregional trade from the tariff liberalisation process. This study finds that the excluded trade amounts to nearly 53 per cent of current import trade amongst South Asian countries, bringing into question the future prospects for meaningful economic cooperation under a regional framework. At the very least, if the SAFTA treaty had built on the existing bilateral FTAs in the region, it would eventually have come to supersede such agreements. Unfortunately, the regional initiative has lagged well behind the bilateral process, and is likely to be overtaken by alternative strategic trade policy initiatives cropping up in the region. It seems likely that attempts at economic integration of the South Asian region under the SAARC framework is liable to fragment.

Effects of Regional Trade Agreements on Trade in Agrifood Products: Evidence from Gravity Modeling Using Disaggregated Data

The recent proliferation of regional trade agreements (RTAs) has intensified the debate on their merits. This study contributes to this debate by analyzing trade creation and diversion effects of the North American Free Trade Agreement (NAFTA) on trade in six important agrifood products. An extended gravity model is estimated using pooled data and generalized least squares methods. The result shows that the share of intraregional trade is growing within NAFTA and that NAFTA has displaced trade with the rest of the world. While NAFTA has served to boost trade among its members, it reduced the degree of openness to trade with nonmembers.

Monetary and financial integration in Asia: Introduction

Surging growth and rising interdependence of East-Asian economies during the last two decades have heightened interest in monetary and financial integration. From 1985 to 2005, the share of intra-regional trade in total trade for the South-East and East Asian region (including Japan) grew from 28% to 34%. Around the middle of this period, in 1997, the rapid propagation of the Thai currency crisis over South-East Asia lent urgency to accompanying economic integration with steps toward monetary and financial integration and for jointly improving the quality of financial supervision in the region.

L’accélération de l’intégration du commerce extérieur des pays de l’ASEAN au marché mondial

For the period 1965-1977, for each of the five ASEAN member countries (Thailand, the Philippines, Malaysia, Indonesia, Singapore) as well as for the whole of the region, were examinee the evolution of the volume and of the components of the import and export trade, as well as that of the proportional share of the various trading partners. The following tendencies are apparent. 1) The region's national economies are increasingly « world trade oriented ». 2) Since the founding of ASEAN in 1967, the proportional share of intraregional trade has been declining. 3) The composition of this trade is increasingly determined by the needs of industrial countries. 4) The proportional share of the trading carried out with industrial countries, and particularly with Japan, is also increasing. 5) Singapore seems to play a key role in this articulation of the integration of the region to the world market, an integration detrimental to regional internal integration, an official goal of the ASEAN.

ASEAN and the Regionalization and Globalization of World Trade

The three decades of ASEAN's life have coincided with powerful tendencies towards regionalization and globalization of economic activity. This article (I) discusses these worldwide tendencies and their implications for ASEAN; (2) compares the dynamics of trade expansion within ASEAN with those of the European Union and the North American Free Trade Agreement territories; (3) discusses ASEAN in the context of the Asia-Pacific Economic Co-operation forum, and (4) argues that ASEAN is a successful example of economically efficient regional co-operation to achieve trade expansion. I. A Successful Regional Group ASEAN was formed amongst five states three decades ago with mainly political objectives. This was a time of recent military conflict and considerable continuing tension amongst several of ASEAN's members. It was a time of political instability on the border of the original ASEAN, in particular with the war in Indochina. And it was a time of political uncertainty within several of the ASEAN members, as they sought a firm basis for development. The political objectives were met splendidly. Gradually, objectives of economic co-operation became more prominent in ASEAN - notably in a programme of special measures to promote internal trade expansion from 1976, and with the formation of the ASEAN Free Trade Area (AFTA) from 1992. The programmes to expand trade amongst ASEAN economies prior to the formation of AFTA were generally seen as having been unsuccessful. The complementation agreements and ASEAN industrial projects of the late 1970s did not amount to much. The ASEAN trade preferences did not bite deeply, and were overtaken by multilateral trade liberalization. It was common to point to relatively modest shares of intra-ASEAN in total trade (24 per cent in 1965, 24 per cent in 1995, and lower ratios in between) as evidence of the modest importance, or the unimportance, of the region to the economy of its members. This article sets out to demonstrate that this is a false perspective. Intra-ASEAN trade has grown more rapidly than trade within either of the major regional trading blocs over these past three decades. Intra-regional trade absorbs a higher proportion of the production of the ASEAN economies than of the members of the European Union (EU) or the signatories of the North American Free Trade Agreement (NAFTA). These powerful facts have been obscured by focus on another statistic - the share of intraregional trade in total trade. This focus counts as a failure what is in reality a great achievement of ASEAN: the maintenance of rapid growth in extra-regional, and especially intercontinental, trade alongside strong expansion from a high base of trade within ASEAN. ASEAN as a regional economic arrangement is an outstandingly successful example of open regionalism, or regional co-operation to promote regional trade without discrimination against outsiders. The three decades of ASEAN's life have coincided with powerful tendencies towards regionalization as well as globalization of economic activity. Section II of this article discusses these world-wide tendencies and their implications for ASEAN. Section III compares the dynamics of trade expansion within ASEAN with those of the EU and NAFTA. Section IV discusses ASEAN in the context of the Asia Pacific Economic Co-operation (APEC) forum, and argues that ASEAN is a successful example of economically efficient regional co-operation to achieve trade expansion. It raises a few questions about how the financial problems of 1997 might affect this success. II. Regionalization and Globalization The three decades of ASEAN's existence so far have seen rapid and inexorable increase in the role of international transactions in global economic activity. There has been a tendency towards acceleration of the internationalization of economic life, especially since the mid-1980s. This has been reflected in large increases in the ratio of international trade to GDP, and even more rapid increases in the ratio of international [trade] to total investment. …

Intra-Saarc Trade: A Dwindling Feature

Most of the South Asian countries, namely Bangladesh, Bhutan,1 India, Maldives, Nepal, Pakistan and Sri Lanka formed a loose association SARC (South Asian Regional Cooperation) in the year 1980. Through various meetings and conferences spread over five years under the banner of SARC, an agreement was signed in December 1985 for the formation of SAARC (South Asian Association for Regional Cooperation. SAARC member-countries have chosen some areas of cooperation like, agriculture, rural development, meteorology, telecommunication, scientific and technical cooperation, health and cooperation activities, transport, postal services and sports, arts and culture. The most recent development that has taken place concerns the meeting of Group of Planners on a yearly basis to review the studies made under the aegis of SAARC in the following areas2 (i) Analysis of trade regimes vis-a-vis industrial protection policies of member countries; (ii) Quantification of the benefits of intra-regional trade expansion including transit problems of land-locked countries and mechanism for financing short duration trade imbalances; (iii) Studies to explore the possibilities of joint ventures in agriculture, industry and energy; and (iv) Studies of existing national systems of industrial promotion and regulation including assessment of design and consultancy capabilities and post-harvest technologies. Inspite of these, the subject of cooperation for intra-regional trade expansion still remains outside the SAARC programme. There is little cooperation in the SAARC region in the sphere of trade. Bangladesh, India and Sri Lanka (among other Asian countries) are signatories to the Bangkok Agreement under which each member country gives certain preferential treatment to the co-signatories in the field of trade. This Preferential Trade Agreement signed in July 1975, under the auspicies of ESCAP covered multilateral trade cooperation but has made very limited impact on expanding intra-regional trade among the three countries listed above. Apart from this, the SAARC countries are the members of Asian Clearing Union (ACU), set up in 1975, with a limited coverage of membership, transactions and credit facilities in this region. In spite of SAARC countries' participation in two major schemes of multilateral trade cooperation, the region lagged behind the rest of the world in expanding their trade. Over a period of time, the share of intra-regional trade in this region declined in comparison to world trade. The fall in the share of infra-regional trade can also be seen in a relative sense. Thus, the dependence of these countries upon developed countries has increased and foreign trade has failed to act as an engine of growth in this region. The aim of this paper is to examine: (i) Declining export and import growth rates of SAARC countries; (ii) SAARC countries' aggregate exports and imports share in world exports and imports and its burgeoning trade balances', and (iii) Intra-regional exports and imports share of SAARC countries and SAARC share in its total exports and imports to the rest of the world.