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The sustainability of FTAs

GIE doing business

Khloe Rg

on 24 March 2013

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Transcript of The sustainability of FTAs

What is a FTA? Challenges Opportunities and future prospects Question? Case Study:
The AFCTA Thank you The Sustainability of Asian FTAs:
scope, challenges, and future prospects Definition FTA development and implementation Economic effects of a FTA FTA diversity Trends - Deepening market driven economic integration in Asia
- European and North American economic integration
- The 1997- 1998 Asian financial crisis
- Slow progress in the WTO Doha negotiations Growth - Wider market access
- Preferential tariffs
- Eliminate economic barriers
- New business opportunities Why are they
profitable? What's the ACFTA Negotiation and signing
of ACFTA Content of the FTA Political and Economical effects Opportunities Conclusion Conclusion Discussion topics:

Will an "Asian Union" be possible in the future?

Are FTA a real threat to employment?

Are FTA the first step in cultural and political integration? Improving firm-level
of FTAs preferences Noodle bowl problem The coverage
of agricultural
goods trade Forming a
Regionwide FTA Challenges What is a FTA? Future prospects - 2 possible pathways :
* Trans-pacific partnership (TPP)

- 'Resources related' FTAs
* Chile
* Australia

- 2013 : Taiwan/Singapore FTA ASEAN-China Free Trade Agreement
The signatory countries are: China Indonesia Brunei Malaysia Philippines Singapore Thailand Formally proposed in November 2000

A study task-force established in March 2001

Countries engagement in 2001

Initial implementation in 2010 Tariffs on about 8.000 goods were lifted

Free exports/inports for about 60.000 types of products Remarkable free-trade zone;

The ACFTA represents of GDP of 6 trillion USD;

Outstanding contribution to the East-Asian regional integration process;

A turning point in Chinese politics Remarkable growth in exports withing signing countries;

Tighter and productive political cooperation;

Contribution to GDP growth of each country of 1% per year on average; "lower cost of inputs will allow business community a wider choice of goods and they will move towards becoming more competitive globally" Challenges More intense competition in some industries, such as garments, furniture, footwear and cars.

Risk of delocalization of firms, resulting in a fall in employment rate.

Weak competitiveness of some ASEAN SMEs products, compared to Chinese products. "An FTA is an undertaking by signatory countries to remove trade barriers that exist between them" Categories - full FTA
non reciprocal
partial scope
"FTA plus" Phase 1: the FTA proposal

Phase 2: Negotiation

Phase 3: Feasibility study

Phase 4: Implementation FTAs differ widely mainly depending on the countries willingness to converge to the free-trade equlibrium
Rules of origin regime
Implementation Major differences in Specialization
The economies of scale
A tighter political collaboration
Competition and efficiency Risk of monopolies by Simone Battistino
Pernille Grondahl
Chloe Rouge
Full transcript