“NEW REGIONALISM” IN ASIA: A

COMPARATIVE ANALYSIS OF
EMERGING REGIONAL AND
BILATERAL TRADING AGREEMENTS
INVOLVING ASEAN, CHINA AND
INDIA

Rahul Sen
WHAT’S “NEW REGIONALISM”?

Resemblance of ongoing phenomenon

of proliferation of bilateral and regional
trading agreements in the Asia-Pacific,
especially in the aftermath of the
regional financial crisis.
INTRODUCTION
 Rapid proliferation of wave of “new
regionalism” among Asian economies over the
past decade

 More diverse in scope and coverage than

traditional Free Trade Agreements (FTAs)

 Phenomenal proliferation of bilateralism due to:

 Slow pace of progress of multilateral trades
negotiations in WTO
 Bilateral trade serves key diplomatic and security
ends
INTRODUCTION
 Agreements aimed at ‘deeper integration’
among trading partners – termed as
Economic Partnership Agreements (EPAs)

 “Stumbling block” vs “building block”

 Applying models of modern trade theory and

similar modelling techniques to understand
the phenomenon and its implications is
challenging
OBJECTIVE OF PAPER
 Provides a comparative analysis of the
ongoing bilateral and regional initiatives
involving ASEAN, China and India

 Attempts to analyse the similarities and

differences among ASEAN, China and India
with respect to the negotiating framework,
coverage of issues and depth of its
commitments
KEY FINDINGS
 Concerns from new regionalism

 Discriminatory against non-members

 Potential trade diversion

 Inefficient
utilisation of scarce resources that
could be devoted towards multilateral
negotiations in WTO

 Applicability
and consistency in negotiating
framework of overlapping member countries
KEY FINDINGS
 Perceived benefits from new regionalism

 Actas catalyst in enhancing the pace of

multilateral trade liberalisation

 Facilitate
government to initiate domestic
economic reforms

 Member countries are committed to maintaining

peace and stability amongst themselves
KEY FINDINGS
 Trade in Goods

 Exclusion of few products from tariff reductions is

insignificant

 Non-tariff
barriers are progressively reduced and can
only impose those permitted under the WTO

 Rules of Origins (RoOs) differ across different FTAs that

could increase compliance costs for adhering to these
RoOs

 Application of RTA safeguard measures as part of FTA

KEY FINDINGS
 Trade in Goods

 Adhering to WTO principles on trade remedies

for most RTAs

 Timelines for negotiations and implementation

vary significantly across BTAs

 Trade Facilitation

 Facilitation
of trade flows through closer customs
cooperation and mutual recognition of standards
and conformity assessment
KEY FINDINGS
 Trade in Services

 Allow foreign service providers to supply service to

it’s RTAs partner

 Enhance cooperation in services to improve

efficiency and competitiveness

 Diversify the supply and distribution of supply

 Mutual recognition of qualification, certification and

licensing requirements

 E.g. Singapore’s enforced RTAs with US and Australia

KEY FINDINGS
 Mutual recognition of qualification & licensing
requirements
 e.g. S’pore’s enforced RTA with USA has provisions for
recognising degrees from certain US Law Schools that would
allow their graduates to practise in S’pore

 Temporary Movement of Natural Person

 Stay in partner countries extended

 Government Procurement
 Private business in one country to sell goods and services
to governments to their RTAs partners
KEY FINDINGS
 Investments
 BTA objective is to create a liberal, facilitative,
transparent & competitive investment regime

 BTA investment negotiations focuses on:

1. Issues of market access

2. Treatment of foreign investments

3. Repatriation of profits

4. Expropriation & compensation

5. Investor protection

6. Harmonisation of business laws

KEY FINDINGS
 Intellectual Property Protection
 Relevant for countries with a huge emphasis on
innovation and R&D in InfoComm Technology
 Should respect copyright rules & patent
protection to maintain a competitive advantage

 E.g. S’pore – USSFTA prevents piracy of

copyrighted works over the Internet,
criminalizing unauthorized reception &
distribution of satellite signals & allowing all
inventions to be patented
KEY FINDINGS
 Competition Policy
 Prohibits anti-competitive business practices to
provide a level playing field for foreign investors
 Exchange of info reagrding any prevailing anti-
competitive practices
 Periodic review of progress of competition
policies are conducted
 E.g.. S’pore – USSFTA states that Govt Linked
Companies (GLC) will be commerically run & the
S’pore govt will not interfere with commercial
decisions of GLCs (such as SingTel, SIA).
KEY FINDINGS
 Dispute Resolution Mechanism

 Provision for quick and efficient resolution of

trade disputes in all agreements

 Private sector allowed a limited role to invoke

dispute under investor-state dispute settlement
in Singapore’s BTAs and TAFTA

 Enforcement is crucial for businesses to minimize

risks from using such mechanism for bilateral
dispute resolution
KEY FINDINGS
 Broader Areas of Economic Cooperation

 Strengthening bilateral economic cooperation in a

diverse range of areas

 Commitment towards developing longer-term

cooperative relationship, enhancing trust and
confidence in each other

 Significantfor long-term strategic and socio-economic

relations among member countries

 Basis for deeper economic integration

KEY FINDINGS
 Convergence or Divergence?

 Exhibit wide differences in scope and coverage of trade

liberalisation

 Minimal degree of commonality is observed in some of

the broad issues covered in the RTAs/BTAs

 Unlikely for ASEAN to undertake common negotiating

positions

 Member countries undertake important domestic and

external sector reforms, but unlikely to be welfare
enhancing in their own end unless concomitant
unilateral liberalisation is also pursued
CONCLUSION
 Increasing recognition among Asian policy-makers that
greater economic coordination and cooperation is essential
to manager globalisation challenges and to enhance its role
in world affairs

 Multilateralism is indispensable to a well-ordered, open and

rational international trading system, and cannot be ignored
at the expense of bilateralism to pursue global free trade

 Pursual of unilateral liberalisation would be essential for

developing countries to gainfully benefit from trade
liberalisation at the bilateral and multilateral level