A specific case of Regionalisation: the ASEAN
- What about?
- A Regional Policy to attract FDI
- The contrast among the members
The effects of Regional Trade agreements over global trade
What about ASEAN?
The contrast among the members
- Made in 1967
- 5 formers countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand.
- 600 million people
- Including almost all the countries in its geographic area (except Eastern Timor)
- Organization's aim: promote free-trade and develop economic growth
- There is one economical leader in ASEAN: Singapore
- Not every countries in the ASEAN take benefit of the "spillover effect" from the FDI: Myanmar, Lao or Cambodia are trying to adapt to the free-trade doctrine, but their old Marxist-Leninist politic system doesn't match with a foreign market penetration.
- The foreign market penetration is higher in the 5 formers States (+Vietnam) than the New States, who need an economic transition to free-trade.
- Regional Trade Agreements (RTA) imply new state politics
- Entering a free trade zone has several effects on trade balances
A regional policy to attract FDI
- The role of the "triple effects" from FDI to develop the economic growth:
- the direct effect (employment+training)
- the multiplier effect (consumption growth)
- the spillover effect (indigenous firms acquire their own knowledge and are becoming competitive)
- A policy based on attracting FDI which offers benefits to its members:
- Direct benefits (directly on GDP growth)
- Indirect benefits (poverty reduction, consequences on social sphere)
Effects of RTAs within states
Effects of RTAs on trade
When imported goods are lower as a result of fall in price from the elimination of tariffs in the free trade area.
RTA may implement common external tariffs, therefore imported goods from countries outside the free trade zone are likely to cost more. Ex :UK's import of lamb before and after joining the EU
- Static effect in the free-trade zone :
Each country focuses on its main subsidiaries in order to export
- Dynamic effect :
- Competitiveness
- International investments
Introduction:
Several meanings of "Regionalization"
PB: How Regionalization can be regarded as a model of growth?
An obstacle to World free-trade
"intermediate form of community," between the national community of the state and the potential global community of humankind (Whiting 1993, 20)
- Regionalization within the state :
"dividing political entities into smaller jurisdictions"
- Regionalization of global economies : trade agreements between regions, or group of states with or without geographical boundaries
- What about free-trade and WTO role?
- The WTO and Regionalization:
- Same principles
- Same aims
- The great paradox: to a Regional protectionism
What about free-trade and WTO?
The great paradox: to a Regional protectionism
Conclusion
The multiplication of Trade agreements
- The concept of free-trade englob the free movement beyond domestic borders
- Progressive lowering of taxes
- WTO => a global forum about trade negotiations
- WTO is regarded as a role of legislator, judge or even policeman between its memberships
Regionalism & Regional Organizations promotes the principles and the same aims regarding to the WTO.
BUT by creating a local free-trade zone area, there is also an indirect form of protectionism.
The WTO and Regionalization process
WTO & Regionalization: same principles, same aims.
Same vision concerning free-trade:
- Free circulation of goods/services
- Non-discrimination between countries
Same aims and rules:
- Free trade reaches growth & development
- Free trade has a political ambition
- Free trade has to be done on a loyalty surrounding.
- The regionalisation can be considered as a consequence of the globalization and the World Trade organization anti-protectionism doctrine.
- The best case of successful regional organization was initially the E.U. and many others grew up such as ASEAN.
- However, there are a lot of contrasts in every free-trade zone (wealth difference, economic integration level, etc) that need to be balanced.
- Definition of Regionalization according to WTO
- Objectives of Regionalization
- The different areas concerned by this phenomenon
- Who are those Organizations?
The different areas concerned by this phenomenon
Economic regional organizations in the World
Definition & Objectives of Regionalization
- Definition of Regionalization according to the WTO: "The recognition that an exporting region (part of a country of a border-straddling zone) is disease-free or pest-free (or has a lower incidence)"
- Regionalism => trendy in the WTO
- Establishment of a free-trade area by customs union, common market, economic union, or economic integration (partnerships).
- Strong geographical polarization of trades
Who are these Organizations?
- ASEAN
- MERCOSUR
- E.U.
- NAFTA ("ALENA")
Different waves of regionalism:
1950's-1960's => EEC in Western Europe. EFTA in 1960
Regionalization and its effects on growth
Thanks for your attention!
PB: How Regionalization can be regarded as a model of growth?
I) The multiplication of Trade Agreements
by Clara Arnaud
II) The effects of Regional Trade agreements over global trade
by Hugo Salvador
III) An obstacle to free-trade
by Anaïs Zelie
IV) A specific case of Regionalization: the ASEAN
by Arnaud Frappier
Arnaud, Hugo, Clara, Anaïs