The Multiple Challenges in Asian FTAs IDEAs-GSEI-ITD Asian Regional Workshop on FTAs: Towards inclusive trade policies in post-crisis Asia 8-9 December 2009 Bangkok Dr. Mia Mikic Trade Policy Section Trade and Investment Division

Presentation Outline Regionalism in Asia-Pacific Status Main characteristics Concerns National level Regional level Management of noodle bowl

Status of Regionalism in Asia-Pacific

Singapore Sri Lanka Bangladesh India Rep. of Korea Lao PDR Thailand Australia Papua New Guinea Source: APTIAD, April 2008, Bangkok Agreement ASEAN 1977 Philippines PATCRA Malaysia Indonesia

Bhutan Sri Lanka Maldives Bangladesh India China New Zealand Brunei Darussalam Cambodia Indonesia Lao PDR Myanmar Philippines Viet Nam Nepal Marshall Is. Micronesia Palau Tuvalu Cook Is. Fiji Kiribati Nauru Niue Samoa Tonga Vanuatu Solomon Is. Australia Singapore Papua New Guinea USA Chile Japan Hong Kong, China Iran, Is. Rep. Jordan Bahrain EU Turkey Afghanistan © APTIAD, June 2009, not all PTAs shown Niger GCC Mexico Panama Peru Qatar Canada Georgia Kyrgyzstan Armenia Kazakhstan Ukraine Azerbaijan Turkmenistan Uzbekistan Tajikistan CISFTA SAFTA BIMSTEC APTA AFTA EFTA PICTA SPARTECA MSG EurAsEC NAFTA MERCOSUR SACU Pakistan Thailand Malaysia 2009 ECOTA Korea, Rep.of. Macao, China Russian Fed. Belarus Moldova

RTAs explosion in Asia-Pacific Interest of countries in Asia-Pacific to negotiate had one peak in mid 1990s and then started to rise exponentially after 2002

…increase in number of RTA in Asia-Pacific is in line with the global trend

Characteristics of RTAs in Asia-Pacific

Architecture of Asia-Pacific RTAs Notes: * FTA & EIA stands for Free Trade Agreement and Economic Integration Agreement- a category of agreements that are notified both under goods and services; * * includes six agreements between Central Asian countries and members of CIS not in ESCAP Source: Compiled from APTIAD, August 2009

Number and make up of memberships: Only one Asian WTO Member (Mongolia) has no RTAs (as yet!) Asia-Pacific non-WTO members: from 1 to 11 RTAs Average per ESCAP 6 RTAs in implementation per economy, minimum=0 RTA, maximum= 22 RTA Often partners from outside the region

RTANTMsInvestme nt ServicesCompetiti on IPRTF ASEAN-Australia-New Zealand FTA (AANZFTA) -*** ANZCERTA 1 *- Separate Separate - Separate APTA 2 -In progress -- ASEAN (AFTA) 2 Separate Separate ASEAN-China PTA 2 -** Separate --***- BIMSTEC-FTA-** -- India-Singapore BTA 1 -*** PICTA -- --*** SAFTA--**- - TRANS-PACIFIC SEP 1 In progress COVERAGE of areas

Difference between RTAs in terms of coverage: Singapore issues bilateral and country-bloc cover more sectors N BTA =66 N RTA =11 N C-B =14

Volume of trade covered As shares of exports to PTA partners in total countrys exports

Concerns - at national levels: Disconnect in pursuit of trade liberalization through multilateral trade system and RTAs: Policy space (investment, competition, services, IPRs, etc) Market access BUT restrictive Rules of Origin Weak institutional dimensions -Consultative processes during negotiations -Monitoring and evaluation of implementation (no appropriate bodies – joint committees but not always functioning well)

Other concerns Trade in Asia-Pacific has been more market- driven (growth-driven?) than PTA-driven: sustainability? Forging agreements with partners outside the region kept Asia as a relatively open bloc: helping global economy? RTAs in Asia not economic integration: weak regional institutions and lack of incentives for convergence? Given changes in global economy, is there a need / possibility for stronger regional trade governance / integration?

Managing the noodle bowl

Towards multilateralization of RTAs? Global – WTO and rules for ensuring that RTAs are building blocks Regional – consolidation /enlargement of RTAs: impact on members vis-à-vis non-members sectoral impacts National – inclusive decision making for growth with more balanced effects (Trade needs to be governed to produce benefits to all. )

Features of the model FTA taking into account rules and needs of developing countries GOODSSERVICESOTHERS trade in goods, including trade remedies (safeguards, anti- dumping measures and countervailing duties) customs procedures rules of origin technical barriers to trade sanitary and phytosanitary measures trade in services, and in particular: o trade in financial services o trade in telecommunications services commercial presence movement of natural persons intellectual property competition policy government procurement trade facilitation investment electronic commerce transparent administration of laws and regulations consultations and dispute settlement and legal and institutional issues

Thank you!