Regional Trade and Economic Integration

Transcription

1 Regional Trade and Economic Integration Analytical Insights and Policy Options Ram Upendra Das Research and Information System for Developing Countries, India Piyadasa Edirisuriya Monash University, Australia Anoop Swamp Shobhit University, India World Scientific NEW JERSEY LONDON SINGAPORE BEIJING SHANGHAI HONG KONG TAIPEI CHENNAI

2 Contents Preface.- xiii Acknowledgments xvii Chapter 1: Introduction India's Trade Policy Reforms Rationale Scope 5 Chapter 2: Regional Economic Agreements of India: Status, 7 Potential, and Some Experiences 2.1. Experience Gained from Implementation India-Bhutan Free Trade Agreement India-Nepal Trade Treaty India-Sri Lanka Free Trade Agreement South Asian Free Trade Area Agreement India-Afghanistan Preferential Trade Agreement India-Thailand Early Harvest Scheme and FTA India Singapore Comprehensive Economic 15 Cooperation Agreement India-ASEAN FTA India-Malaysia CECA India-New Zealand CECA India-Indonesia CECA Asia Pacific Trade Agreement The erstwhile 26 Bangkok Agreement Global System of Trade Preferences East Asia Summit 29

3 viii Contents Annex Annex Annex Chapter 3: The Economics of Regional Integration and 63 Analytical Insights from Negotiations 3.1. Economic Rationale of Regional Integration Adjustment cost versus efficiency concerns Linkages between trade in goods and trade 66 in services Trade-Investment linkages Importance of regional economic integration 67 for scale expansion Trade creation and diversion Trade diversion not necessarily bad Rules of origin: Developmental outcomes Some empirical estimates Tests of stationarity Levin-Lin-Chu test Im-Pesaran-Shin test Hadritest Analytical Insights from Negotiations "Substantially all trade" Sensitive list Safeguarding the sensitivities of the 81 agriculture sector: Lessons from RTAs of the ASEAN countries and some developed countries Treatment of agriculture sector in 91 agreements of the developed countries Summary Rules of Origin, The rationale Modalities Change in tariff heading versus change 96 in tariff subheading

4 Contents ix Rules of Origin as a development policy 98 tool Enhancing the feasibility of welfare-inducing 99 FTA Trade in services Uniqueness of services Major characteristics of services Theories of trade in services Relevance of services trade integration 104 in SAARC Investment cooperation 105 Annex Annex Chapter 4: Empirical Estimation of Economic and Welfare 145 Gains 4.1. Computable General Equilibrium Modeling Estimates 145 (GTAP Simulations) 4.2. Effects of Tariff Reduction and Trade Facilitation Simulation results GDP and welfare gains Trade gains Saving, investment, and net foreign 148 capital inflows Intra-FTA imports and prospects for 149 exports to the world 4.3. Bilateral FTA India-Thailand FTA The model and assumptions Impact not captured by the model Potential areas of trade expansion India-Malaysia FTA, Bilateral exports projection Computable General Equilibrium simulations Gains from the EAS process 164

5 x Contents Annex Chapter 5: Policy Implementation Issues in Regional 171 Trading Arrangements 5.1. Circumvention Objective to check unfair trade practices Antidumping Duty (AD): 171 Price-discrimination Countervailing duty: Foreign export 173 subsidy Circumvention of rules: Case studies Tariff-rate quota Are rules necessarily bad? Improving Implementation Harmonization of codes, valuation, and procedures E-implementation 183 Chapter 6: Issues for Further Negotiations Non-tariff Barriers Major Categories of Non-tariff Measures and Related 190 Policies Quantitative restrictions and similar specific 190 limitations Non-tariff charges and related policies affecting 191 imports Government participation in trade, restrictive 191 practices, and more general government policies Custom procedures and administrative practices Technical barriers to trade Trade in Services GATS framework Approaches to trade in services liberalization Economic Needs Tests Negotiating modalities 195

6 Contents xi Approaches to interrelated services sectors Transparency in domestic regulation Rules of origin for services Investment Cooperation Investment and services inter-linkages in 206 Regional Trading Agreements 6.5. Trade Facilitation 209 Chapter 7: Conclusion 215 Bibliography 217 Index 229