Discussion Paper
No. 2012-68 | December 21, 2012
Heribert Dieter
The Drawbacks of Preferential Trade Agreements in Asia
(Published in Multilateral Trade Liberalization and Regional Integration under Stress – Workshop in Honor of Prof. Dr. Rolf J. Langhammer)

Abstract

Preferential trade agreements are mushrooming in Asia. However, they have not been facilitating intra-regional trade as much as the supporters of these exclusive arrangements have suggested. The complexities of rules of origin – part and parcel of all preferential agreements – have resulted in low utilization rates in Asia. The key driver of trade integration in Asia has been the rise of China, and not preferential trade agreements. In the past two decades, China has managed to establish itself as the indispensable trading partner in the region. In 2011, China accepted a trade deficit with its neighbouring countries whilst producing surpluses with the USA and the EU. At the same time, deeper trade integration in Asia, e.g. an Asian wide customs union, appears to be unrealistic. At this juncture, the political obstacles that hinder a deepening of co-operation are formidable. Other Asian countries wish to co-operate with China, but they demonstrate an even rising reluctance to enter far-reaching integration projects with Bejing.Paper submitted to the special issue Multilateral Trade Liberalization and Regional Integration under StressWorkshop in Honor of Prof. Dr. Rolf J. Langhammer

JEL Classification:

F14, F15

Links

Cite As

[Please cite the corresponding journal article] Heribert Dieter (2012). The Drawbacks of Preferential Trade Agreements in Asia. Economics Discussion Papers, No 2012-68, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2012-68


Comments and Questions



Anonymous - Referee report
March 08, 2013 - 10:19
see attached file