EUASIA FTAs

1
EU-ASIA FTAs

• Razeen Sally
• European Centre for International Political
  Economy/
• London School of Economics

2
EU-ASIA FTAs

• The new EU FTA policy
• -- Global Europe economic/commercial rationale
  WTO plus but also non-trade motives differences
  with EPAs/MENA
• -- Benchmarks for (relatively) strong, clean FTAs
• -- How serious is the economic/commercial logic?
  Labour/environmental standards sustainable
  development climate change etc comparisons
  with US FTAs on WTO plus issues
• -- Arguments from the sceptics Why no FTAs with
  Japan and China? Narrow mercantilism trade
  diversion spaghetti/noodle bowls

3
Asian countries economic and trade indicators
2005
Whole of Taiwan. Source World Bank. WTO
statistical database. UNCTAD WIR 2006 and ADB
4
Applied Tariff rates in Asia
Malaysia 1996 Vietnam 1997. All tariff rates
are based on unweighted averages for all goods in
ad valorem rates, or applied rates, or MFN rates
whichever data is available in a longer period.
Source World Bank
5
Bound and applied MFN tariffs in Asia
The figures are simple unweighted averages of the
tariff rates in percent from the year of 2003 and
2004. Source World Bank
6
Table x Coverage Ratio of Non-tariff Barriers
in Import Trade (Unweighted, percent)
Notes Not available Calculated as
percentage of import value of HS6 tariff lines
affected by NTBs in total imports. NTBs include
quantitative restrictions in the form of all
types of licenses and import authorization,
quotas, import prohibitions, advanced import
deposits, foreign exchange restrictions, fixed
customs valuations, and state trading
monopolies. Figures reported under a given
sub-period relates a single year within that
sub-period. Source Hoekman et al (2002,
Table A-4 and WTO, Trade Policy Review Country
Report (various)
7
FTAs IN ASIA

• FTAs
• -- Proliferation in Asia catch up with other
  regions
• -- Motives foreign policy WTO stalled
• -- Building blocks? WTO-plus FTAs dependent on
  economic strategy
• -- But exceptions, not the rule
• -- Trade-lite FTAs (except with USA and EU?)
• -- Future of Asian FTAs?

8
FTAs IN ASIA

• China and FTAs
• -- 9 FTAs 30 under discussion/negotiation
• -- China-ASEAN increasing complementary trade
  but competing sectors
• -- Encouraging results on tariffs and rules of
  origin WTO-compatible but not WTO-plus services
  and investment?
• -- WTO-plus FTAs with HK and Macau
• -- Negotiations with Aus and NZ
• -- PTAs with SACU, India and others?
• -- Overall pragmatic, eclectic approach
• -- Danger of politics-driven trade-light FTAs
  (unlike China in WTO) but stronger FTAs in east
  Asia

9
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
10
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
11
FTAs IN ASIA

• Southeast Asia and FTAs
• -- Singapores FTAs misleading indicator for
  region
• -- Thailand a better indicator all politics, no
  economic strategy trade-light
• -- Bilateral FTAs take priority over ASEAN-plus
  FTAs (ROO complications)
• -- ASEAN FTAs weak and partial?

12
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
13
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003
14
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
15
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
16
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
17
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
18
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
19
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
20
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
21
FTAs IN ASIA

• India and FTAs
• -- Problems with SAFTA
• -- Outside south Asia trade light foreign
  policy not economic policy
• -- Part of overall trade-policy profile (fitful
  unilateral liberalisation and WTO defensiveness)

22
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
23
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
24
Table 15 Trade among recently established or
Proposed RTAs/CEPAs partners involving ASEAN,
China and India, 2003 (contd)
25
FTAs IN ASIA

• Japan and FTAs
• -- Japan-ASEAN bilaterals take priority
  agriculture carve outs unambitious on other
  market access ROO restrictiveness
• -- Trade light and reactive compared with China

26
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
27
FTAs IN ASIA

• South Korea and FTAs
• -- Defensive on agriculture, but more serious
  than other Asian players
• -- US-Korean FTA negotiations

28
Table 14 Recently Established or Proposed
RTAs/CEPAs in ASEAN, China and India, 2000-2007
(contd)
29
FTAs IN ASIA

• Regional economic integration
• -- APEC a better yesterday
• -- ASEAN Visions galore, but wheres the beef?
  CEPT progress but little else
• -- APT, EAEC, AEC etc. Any common denominators?
  Empty talk?
• -- FTAs unlikely to contribute much to regional
  economic integration disintegration dangers (ROO
  etc)

30
The map shows FTAs signed or under negotiation in
January 2006. East Asia is defined here as the
10 ASEANs, China, Japan and Korea. Source Richard
Baldwin 2006
31
Noodle bowl syndrome in Africa
Source World Bank
32
Noodle bowl syndrome in America
Source Inter-American Development Bank.
33
EU-ASIA FTAs

• EU-China
• -- Strengthen bilateral cooperation (US lessons
  Paulson dialogue initiative TIFA) avoid
  non-trade linkages
• -- Contain EU protectionism, esp. trade remedies
  accord MES
• -- Create external conditions for Beijing to go
  further with liberalisation/structural reforms

34
EU-ASIA FTAs

• EU-ASEAN
• -- From TREATI to FTA
• -- EU-ASEAN (minus X)
• -- Extreme difficulty of doing a strong FTA with
  ASEAN collectively
• -- Two tracks? EU-ASEAN framework agreement
  bilateral FTAs with individual countries (US
  approach TIFA and bilateral FTAs)
• -- EU-Singapore EU-Thailand, EU-Malaysia etc.

35
EU-ASIA FTAs

• EU-India
• -- Extreme difficulty of negotiating strong FTA
• -- Issues agriculture NAMA services
  investment, other WTO plus issues, NTBs
• -- Better to do TIFA-type agreement than FTA?

36
EU-ASIA FTAs

• EU-Korea
• -- Best prospect for strong FTA with big trading
  partner
• -- Riding on US-ROK FTA
• -- But trade diversion and systemic risks?

37
EU-ASIA FTAs

• Assessment
• -- EU trade policy as foreign policy and
  internal-market policy link between internal and
  external liberalisation
• -- Internal-market reforms key trade-policy
  reinforcement
• -- Where do EU FTAs fit in?
• -- What about the WTO? And China-led unilateral
  liberalisation