presentation: redesigning east asian integration · seamless asia :asean logistics initiative 10...
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Redesigning East Asian Redesigning East Asian IntegrationIntegration
Yukiko FukagawaWaseda University
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After several yearsAfter several years::Back to APEC?Back to APEC?
ASEAN+3: Remaining dilemma for regional integration① Centripetal vs. Centrifugal force ② Sovereignty vs. Institutionalization③ Hub geopolitics
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Momentum for the regionalism?Momentum for the regionalism?No common threats after the financial crisisDiversified interests among +3
(1) Japan: Australia, India> China(2) Korea: US, EU> East Asia(3) China: Energy security> regionalism
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After the 1After the 1stst round of ASEAN+1round of ASEAN+1……....Major constraints are confirmed…..
(1) China: Still under the enhancing rights?(2) Korea: Institutional level and coverage?(3) Japan: Agricultural protectionism forever?
Bottom lines are….(1) Japan: Real merits for Japan’s MNEs(2) China: Capitalist status(3) Korea: ROO in Kaeson products?
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Economic dilemmaEconomic dilemma
Openness: Dependency on the U.S. marketRemaining dollar regime but with macro disequilibriumChina’s real absorbing power?Competitive structure except JapanJapan’s constraints in agriculture sectorKorea’s desire openness
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Policy dilemma Policy dilemma
Basic conditions unchanged(1) FDI driven trade(2) Tradition of “industrial policy”(3) Competitive manufacturing vs. fragile financial systemSovereignty vs. Regionalism
(1) Less comprehensive FTA package (FTA>BIT)(2) WTO consistency?: Reciprocity principle(3) Cross-border industrial adjustment?
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Geopolitical dilemmaGeopolitical dilemmaChina: Political will + Weak institutional capacity →“Business oriented FTA” “Flexibility”Japan: Less political will + Institutional capacity→ “Rule based FTA” “Transparency”Double hubs for different FTAs with the others→ Diverging FTA with the other members (ex. Thailand) → “Insurance” seeking incentives for openness (ex. Korea)
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Diverging Diverging FTAsFTAs (1)(1)
Regional integration without a hub FTA with enhancing rights
(ex. China-ASEAN FTA: great liberalization but with enhancing rights?)Intra-regional FTAs synchronizing Inter-regional FTAs
(ex. Korea: U.S., EU, Canada, India, Mexico, Mercosur….Thailand: Australia, U.S., India, Peru…..)
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Figure H ub-ness in East Asia
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Diverging Diverging FTAsFTAs (2): Coverage(2): Coverage
Different level of liberalization: Investment and serviceNo commitment for national treatmentCompetition policy coordination with China?Low level of IPR protectionTrade facilitation at what level?
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Diverging FTA coverageDiverging FTA coverageTariffInvestment Service FacilitationDisputesMRA IPR Comp.Persons
N. treatmenex post List Performance c.List N. treatmentcross-border
NAFTA ○ ○N ○ ○N TRIMS+ ○N ○ ○ ○ ○ ○ TRIPS+○ ○J-Mexico ○ ○N ○ ○N TRIMS+ ○N ○ × ○ ○ ○ ○ ○ ○J-Singapore○ ○N ○ ○N TRIMS+ ○P ○ × ○ ○ ○ ○ △ ○J-Thailand ○ ○N ○ ○N TRIMS+ ○N ○ × ○ ○ △ △ △ ○J-Malaysia ○ ○N ○ ○N TRIMS+ ○N ○ × ○ ○ △ △ △ ○J-Philippines ○ ○N ○ ○N TRIMS+ ○N × × ○ ○ △ △ △ ○K-Singapore ○ ○ ○ ○N TRIMS+ ○P ○ △ ○ ○ ○ ○ △ ○K-Chile ○ ○ ○ ○N TRIMS+ ○N ○ ○ ○ ○ ○ ○ ○ △Aust.-Thailand○ ○ ○ ○N △ ○N ○ × ○ ○ △ ○ △ ○Aust.-USA ○ ○N ○ ○N TRIMS+ ○N ○ ○ ○ △** ○ TRIPS+○ ○AFTA ○ ○P ○ ○ × ○P ○ × ○ △** △ × × △ACFTA ○ × × × × × × × ○ △** × × △* ×CARICOM ○ ○P × × × ○N × × ○ ○ × × × ×MERCOSUR ○ ○N ○ × ○TRIMS+ ○P ○ × ○ ○ × × × ×COMESA ○ ○P × × × ○P ○ × ○ ○ × × × ×Note: * Market economy status by China ** Investor-Sate relations close○:Explicit, △: Less explicit comitttment, ×:no commitment○N: Negative list, ○P:Positive list, ○S:Stand-still onlySource: World Bank (2005)
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Diverging Diverging FTAsFTAs (3): rule of origin (3): rule of origin (1)(1)
Major ROOs① PANEURO:Generous intra-regional rules with de minimis, roll-up, cumulation/ Strict inter-regional rules with change in heading number, alternative close, MC standard…)② PANAMERICA: Rigorous and complicated rules with change in heading number in combination of 2 digits and 4 digits, Divergent value-added standard, bilateral cumulation…. ③ PANASIA? :Generous and simple rules with 40% of value-added only, full cumulation, RCV standard….
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Diverging Diverging FTAsFTAs (3): rule of (3): rule of origin(2)origin(2)
Proof of roo① License by authorities : ROO by exporters + Examination by importers (preventing de-tour export, complication) → Japan, S-Australia, ASEAN② Self declaration: Report by producer/exporters (Potential false report, simplicity) → Korea-Chile, Singapore-EFTA, Japan-Switzerland??
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Potentially high const of ROOPotentially high const of ROO
Administration cost Koskinen(1983) : Finland’s case of EC-EFTA(1.4-5.7% of export) Virtual protection effect? Krueger (1985) : Canada’s loss in NAFTAFukagawa (2001): Approximately 2% of Japan’s export gain in Japan-Korea FTA
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Dual track approach for the Dual track approach for the regionalismregionalism
WTO-consistent FTAsFTA-complementary cooperation
(1) ROO coordination and trade facilitation(2) BIT beyond TRIMs(3) Strategic liberalization in services(4) Standardization and MRA (5) Financial cooperation in settlement
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Great Impact of trade facilitation on Great Impact of trade facilitation on GDPGDP
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Trade liberalization
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Great Impact of trade facilitation Great Impact of trade facilitation on on economic welfareeconomic welfare
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Asia Gate Way: JapanAsia Gate Way: Japan’’s New s New ApproachApproach
Strategic partnership with ChinaPositive response by the U.S.Practical merits> Exhausting politicsThe Concept of “Asia Gate Way”Seamless Asia ①: Logistics InitiativesSeamless Asia ②: Tokyo Financial MarketSeamless Asia ③: Internationalizing the domestic industries
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Seamless Asia Seamless Asia ::Custom ClearanceCustom Clearance
Next generation of “Single Window”system
Japan’s version of C-TPAT (Custom-Trade Partnership Against Terrorism, Compliance program, conversion of the programs), AEO (Authorized Economic Operators)
Standardization of the procedures
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Seamless AsiaSeamless Asia::System integrationSystem integration
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Seamless Asia Seamless Asia ::ASEANASEANLogistics InitiativeLogistics Initiative
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P o rt-w is e D a ta (O p e ra tio n )
P ort In fo rm a tion (O peration D a ta )
- C o n ta in e r T h rou gh p u t- C a rgo H a n d lin g V o lu m e- M a jo r S h ip p in g R o u te- L e a d -tim e from /to O the r
P o rts- T ra n sp o rta tio n C o s t from /to
O th e r P o rts- C o n n e c tiv ity to R o a d , In la n d
W a te rw a y a n d R a ilw a y
- C o n ta in e r T h rou gh p u t- C a rgo H a n d lin g V o lu m e- M a jo r S h ip p in g R o u te- L e a d -tim e from /to O the r
P o rts- T ra n sp o rta tio n C o s t from /to
O th e r P o rts- C o n n e c tiv ity to R o a d , In la n d
W ate rw a y a n d R a ilw a y
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Seamless Asia Seamless Asia ::ASEANASEANLogistics Initiative(2)Logistics Initiative(2)
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Softw are Infrastructure of Logistics
1. S pecia l Traffic C ontrol in U rban Area2. In troduction o f ED I (E lectron ic D ata In terchange)3. In troduction o f B ar C ode4. E xport/Im port D eclaration D ocum ents5. S tandard H ours o f C ustom s C learance6. R u les on R ecords o f O rig in7. Law s and S tandards on Logistics8. L icenses Approvals on Logistics S ervice
Logistics related R ules and R egulation
1. Train ing C ourse on Log istics and SC M2. U niversity O ffering Logistics C ourse3. Q ualification on Log istics and R elated Service4. M ajor Log istics C onsultants5. M ajor Logistics Service P rovider
Logistics Education and Service
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Seamless Seamless Asia:EnhancingAsia:EnhancingTokyo MarketTokyo Market
Goal:Gate Way for domestic assets+Capital allocation of firms (non London type)
Better usability:Regulation and tax system, Supervisory system, Dispute solution, Electronic platform, Airport innovationProfessionals: Law, Accounting, Auditing, Pension management, Analyst, System operationGovernment-Private exchangeFinancial products
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Seamless Asia: Enhancing the Seamless Asia: Enhancing the Financial PlatformFinancial Platform
Mitigating the risks①: Regional integration (Surveillance, “Asia clear”, Bond guarantee) Mitigating the risks②: Information gathering (International accounting, English information opening, Hiring locals)Mitigating the risks③: Depositary Receipts and other allocation system、Insurance, Global Counting Management)
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Conclusion: Conclusion: Dual track approach among +3Dual track approach among +3
Functional cooperation should lead and enhance the market-driven integrationInstitutional conversion of +1 FTAsBreak through in Japan-Korea FTAInstitutional conversion of China-KoreaASEAN way as the heritage: Pragmatism, Gradualism, and Tolerance