The Political Implications of FTAs in East Asia - Case Study Example

This paper provides an impression of recent developments in the procedure of Asian economic assimilation. The study will center on the integration proposals undertaken within the structure of the Association of South-East Asian Nations (ASEAN). ASEAN was not only the initial regional unification arrangement in Asia; it also stays as the center at present and upcoming economic integration proposals in the extensive East Asian region. The development that has been made by ASEAN’s member nations in creating an ASEAN Free Trade Area (AFTA) will be evaluated.

Given the significant and rationally successful proposals for integration in other parts of the globe, for instance, the EU and NAFTA, academics and politicians have dedicated their concentration to the possibilities of both intensifying and widening economic association in the East Asian region. This paper contends that regional assimilation in South-East Asia is at least as reliant on economic collaboration and positive response from external partner nations and regions as it is on domestic economic consequences.

The ASEAN made vital steps towards regional assimilation in the last decade by creating the ASEAN Free Trade Area, encouraging the ASEAN Investment Area, and negotiating and amending Free Trade Agreements (FTAs) with main trade associates. Due to the market prototypes in the ASEAN the intra-regional trade and investment decline to a low level. Accordingly, it is debated that regional integration as an outcome of economic assimilation in South-East Asia is principally dependent on broadening economic collaboration.

The main principle of this paper is to provide a general idea of the efeffect hof e A AN Free Trade Agreement (AFTA) on Asian countries. Nations belonging to specific regional bloc encourages the free flow of capital, inexpensive labor, and other products, to reinforce their economy by signing Free Trade Agreements (FTAs). The main reason for signing FTA is to augment their cross-border trade by decreasing taxes on their exports and imports so that customers can acquire products at a cheaper price.

Introduction:
One of the most interesting topics the in International Political Economy domain might be the discussion about regional economic integration with globalization trend. With the development of transportation and means of communication, the world economy has been rapidly integrated. And like many research results are shown, as time goes by, the volume of trade in the world also has been drastically increased. This growth of trade was rapid especially after some organizations such as GATT and WTO. Meanwhile, some interesting features es of the world economy have appeared on the surface, which is called ‘Regionalism’. In this side of view, one of the noteworthy trends of recent increasing trade is called ‘block economy’. The success of EU is the suggestive when we look into the status of the regionalism globalization era. This case shows us many implications about regionalism and its form all over the world. Generally, it is easy to think that Globalisation and Regionalisation are mutually exclusive to each other. Multilateralism, or Globalisation of the world economy, often assumes rapid transnational integration, but regionalism represents an exclusive tendency to other groups of countries. However, these two coexist in the real world as shown. Actually, even though the evolvement of the World Trade Organisation represents ‘the world without borders like successful EU case shows us, regionalism cannot be neglected in the recent global economy.

When it comes to Regionalism, the East Asian region has been turned over other regions up to recently. However, it has been changed as time passes by. With the global trend of liberalization and regionalism, which represented by the successful integration and expansion of the EU, the East Asian region seems swiftly absorbed into the trend of regionalism. Moreover, take into account the importance of the US in that region, promoting NAFTA led by the US, which showed the abandonment of multilateralism of US was pregnant for East Asian countries. That is why the US was a great supporter of a multilateral agreement, the US’s turnover had provoked the East Asian region to switch to a regional-based approach. Internally, the demand for a positive trade policy has been created after the financial crisis in 1997.

When taking into account East Asia’s importance of world economy, it seems that previous study about East Asia is attaching too much importance to its analysis as a developmental state. They are far from the current trade form of East Asia. It has been lightened by the Western view. When World Bank’s report pointed out, East Asian countries share their special experience can be called ‘the Asian Way’ of development, which are totally different from Western-style of economic development. However, East Asia also has its gravity purely as its economic size and peculiar characters with reference to regionalism. Indeed, East Asian countries have numerous and dynamic characteristics that can attract scholars’ interest. East Asian region is one of the largest economy blocks, which include Japan, China, and Korea. According to WTO, it occupies a 2.6 trillion dollar market and a 1.9 billion population of the world economy. These figures directly show the relative importance East Asia has.

And when reminded again of the fact that thriving regionalism is one of the most important features of the world economy with globalization, which cannot be neglected, current debate, is extremely confined. We can find this fact in the history of debate on the region. The main discourse about East Asia before the 1990s was based on the confidence in miraculous economic development. They see the East Asian community only as an alternative development model, which has been developed with the concept of East Asian identity. This narrow approach has dwindled away. However, there are still critical limitations to this kind of debate.