Second, others make the claim that free trade is a threat to culture as a way of life and therefore to national identity without discussing the specific cultural provisions of the FTA. Pierre Berton, for example, argues that, since Americans and Canadians are two different peoples, ‘at the heart of the free trade debate is a fear of surrendering some of those peculiar institutions and practices that help make us a distinct and sovereign people.... [F]or the first time, Canadians have had to ask themselves what kind of people we are and what kind of people we want to be’.56 Graeme Gibson continues this line of argument. He first sets out his idea of nationhood, following from Andre Malraux (former French Minister o f Culture): ‘ [t]he mind supplies the idea of the nation, but what gives that idea its sentimental force is a community of dreams’. In this context, he asks, ‘[w]hat “community of dreams” is evoked by the phrase “Canada is open for business”?’57 According to Gibson, this is a very passive national conception. In this light, he encourages Canadians to be more actively nationalist and to look beyond free trade towards different options which may better serve the ‘good’ of the Canadian nation. Michelle Landsberg focuses on the idea of political culture. She argues that the strength of the democratic left in Canadian politics has spun a web of collective responsibility that inspires a view of the world different from that of the United States, including a whole tradition of non-commercial culture. If expressions of Canadian culture wither away in the competitive market, then a distinctive Canadian political culture and national identity will also be lost. Finally, Mel Hurtig sums up the feelings of many in the book when he argues that the free trade agreement will mean giving up on Canada.
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At a general level, our analysis sharpens the stumbling versus building bloc debate regarding FTAs by highlighting conditions under which each of the two e¤ects is likely to obtain. More speci…cally, when countries are relatively symmetric, the option to pursue FTAs hinders the obtainment of global free trade in the sense that free trade is no longer uniquely stable when FTAs are permitted. On the other hand, free trade is harder to sustain under asymmetry and FTAs can actually be desirable from a world welfare perspective. In fact, we show that there indeed exist circumstances where global free trade obtains as an equilibrium only if countries are free to form bilateral FTAs. We also …nd that FTAs can deliver welfare improving trade liberalization when multilateral free trade is infeasible – i.e. it may indeed be better to have some trade liberalization (even though it occurs on a preferential basis) as opposed to none. Another interesting result of the paper is that a hub and spoke type trading regime is not a stable equilibrium under symmetry. Finally, it is worth noting that FTAs never act as strong stumbling blocs in our model – i.e. it is never the case that the FTA game yields no agreement whereas the No FTA games yields free trade.
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Abstract:- The wholesome disillusion of protectionism among industrialized countries emerged after World War, henceforth, former allied power the aegis of the General Agreement on Tariffs and Trade (GATT) adopted New Multilateralism that evolved into ‘Free’ (fair) Trade (Sandrey,2013). Since then the world-over has seen growth in trade among nations, states which has also been contributed by manifestation of globalization. There is increasingly unification of capital markets, internationalization of production, mega-revolution in information, networks, distribution, communication and technology. In view of that member states of Southern Africa Development Community (SADC) felt prudent in 2008 to achieve liberalize intraregional by trading in goods and services hence, SADC Protocol for Free Trade Area (FTA) was adopted. This Article is on Free Trade Agreement and Prospects of Regional Integration in Southern Africa with an evaluation of impingements of SADC-FTA. The Article highlights the introduction, background of SADC FTA, cites two other trading blocs thus, the stand alone and the regional organized. Thereafter, the article evaluates the impingements and draws the conclusion. The article is the product of a qualitative research methodology study conducted on the benefits of South Africa from FTA. The study used secondary data to which units, categories and condensation applied to analyze the data. The geographical proximity, overlapping membership, policy harmonization, indivisibility of sovereignty, dependence syndrome, lack of industrial capacity, political barriers,
By globalisation I mean the following: the least hindered trade between as many people as possible; in effect this means the destruction of obstacles to trade such as subsidies and tariffs across national borders (what I shall henceforth call free trade). Secondly, the implementation of free market economic systems in undeveloped regions, and industrialisation and the division of labour in those countries. As for the second part, I am prepared to accept a fairly loose version of this. I consider all western nations to have implemented the kind of policies that I espouse, so I am not limiting myself only to, what many might consider, very right wing economic systems. I am happy to include what is often called „the market friendly approach,‟ as the guiding principles of what globalisation should entail, though I must admit to preferring what is commonly called the Washington Consensus 35 or at least something similar to it, given that the Washington Consensus is now a rather vague notion. Thus, for my purposes globalisation has two distinct halves: the first is free trade, and the second is western style economic practices and technology; i.e., industrialisation and the adoption of free market economies (as opposed to command
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One of the best tools to attract foreign investment – industrial is the creation of free trade zones in Developing countries, free trade zones are the most appropriate way to Providing conditions for free trade in a restricted area of a country, because it may that to make this situation in the country as economic and social terms is not possible or not desirable. Creation of free trade zones, especially in developing countries create jobs and technology transfer and investment that leads to increases national income and foreign exchange earnings.
. As for example, since the late 1980s, the average tariff in Latin America has fallen from forty percent to eleven percent, and this has resulted in the doubling of trade amongst the Latin American countries. Within the MERCOSUR, and also within the Andean Community, trade tripled during the first half of the nineties, growing at a rate around thirty percent per year. Intra-regional trade in Central America doubled in the same period from less than one billion to two billion dollars. Amongst the NAFTA members, intra regional trade doubled from US $227 billion in 1990 to US $475 billion in 1997. This expansion of the commercial network of the Americas has been based on the “new generation” agreements that modernize the old style integration agreements by expanding the reciprocal commitments into new areas and by deepening the level of the discipline. This expansion bode well for the transparency and predictability of trade relations within the Americas to the extent that these agreements are developed under consistent rules and procedures. In and by itself, this is a way of converging to the objective of creating a hemispheric Free Trade Area of the Americas (FTAA). “A free trade area is an agreement between participants who commit themselves to abolish all tariffs and quantitative import restrictions on members, while retaining tariffs and other barriers against non – members. “ (Wrobel, 1998)
This thesis examines a number of issues concerning the free trade doctrine, regionalism and Regional Free Trade Areas (FTAs), with a special focus on the ASEAN Free Trade Area (AFTA). This study is broadly divided into three parts. The first part examines the doctrine of free trade from the perspectives of ideological belief as well as theoretical expositions, and how these influence trade policies of many countries throughout the history of trade. The second part of the study analyses the forces that influence the formation of regionalism and regional FTAs all over the world. In the first and second parts, an extensive survey of the existing literature is undertaken to unearth relevant ideas and events, which are important to policy makers and the general public.
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The United Kingdom has decided to leave the EU. If Brexit does become a reality, a free trade agreement between the EU and Japan would not apply to the UK. We have followed up on this line of thought in a separate scenario. This is based on the assumption that there would be a hard Brexit, whereby the EU and the UK would reintroduce tariffs and non-tariff barriers would increase to the level observed between other WTO members. The results show that it makes no difference to the EU whether the UK were to be party to an EU-Japan agreement or not (conservative scenario only): the percentage change in GDP would be zero on average for the EU 27. Brexit would mean a slight reduction in the value of the agreement to Japan. However, with a difference of 0.03 percentage points in the change to GDP, this loss in value is also marginal. This means that Brexit would have a negligible impact on a conservative free trade agreement between the EU and Japan. It would be the UK itself which would suffer the highest losses in comparison to the other EU member states: as a non-member state, its GDP growth generated by the FTA between the EU and Japan would be 0.06 percentage points lower than it would be without Brexit.
A number of forces were at work which forced Britain to make a turn-around to protectionism in the early 1930s after it had clung to free trade for almost a century. A prolonged business cycle downturn and bad economic condition contributed greatly to Britain’s departure from a free trade policy. Initial stress due to bad economic condition was evident during the WW1 (1914-1918). Majority of the people faced difficulties in carrying out their normal lives because many aspects of economic policy setting were geared towards the War. Trade flows and economic activities suffered quickly and severely during the War – consumer goods production was replaced by military production, shipping was requisitioned for the war, and transporting goods around the world encountered enormous hazards (Capie 1983, 69). Economic conditions improved slightly in the early years following the end of WW1, especially in terms of the growth of Gross Domestic Product (GDP), although unemployment and the loss of potential outputs were still high. Throughout the 1920s the general public in Britain experienced enormous distress as the economy fell into a long period of stagnation; a period of very low growth, due to lack of demand, both internal and external for British products, thus the economy was unable to elevate national output to a satisfactory level. 19 Consequently, the depression pushed up unemployment to reach one million people or 7 percent in the middle of 1920s, and continued to soar to the peak of three million in 1931 (Gomes 2003, 277).
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“free” trade, insofar as the transactions follow the logic of comparative advantage and therefore lead to aggregate welfare increases. However, if we believe in the free market as the best mechanism for deriving the full economic benefit from resources, then this sort of coerced trade will very likely result in the under-utilization of resources, since the parties are not free to bargain fully. Such bargaining is essential to the market’s ability to set prices, which are “adjusted…not by any accurate measure but by the higgling and bargaining of the market, according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life.” S MITH , supra note 7, at 134. Therefore, there is a sound basis in economic rationality for promoting free trade in its fullest consensual form.
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Looking at the demography of Pakistan, it becomes clear that in another 20 years time, Pakistan is likely to surpass Indonesia to become the fifth most populous country in the world with Muslims forming the majority. However, a major parts of Pakistan‘s population comprises of the youth who, if educated and productively employed, could provide its economy with a demographic dividend long after the youth bulges of China and India have aged and retired. Pakistan has a unique opportunity to leverage its large domestic consumer market to attract investment from the multinationals and build up economies of scale in industries such as food, electronics, autos and engineering for export purpose. The restoration of normalcy and peace in an otherwise turbulent South Asian region can provide Pakistan leverage in its geographical position and become a hub of trade and energy transit point. However, a pessimistic look at the country‘s economy makes one feel that the country is caught up in a blind alley. Political instability marks the polity with never-ending military- civil rifts over a host of national and international issues. There are questions of credibility and transparency over state management, which discourage foreign investment. The state institutions are in a shambles with little capacity to rise to the dynamic challenges in the field of economy. The country‘s lack of focus on development of the social sector such as health and education etc. has the potential of pushing Pakistan even backwards with under- nourished and under-educated population having little stake in the state system and being vulnerable to the extremist ideologies. In the absence of correct priorities and sustained political focus on state building, even such dividends, as unique geographical location and demography would be of little help to the country. Rather an economic growth rate of 2.7% annually would make things even more complicated (Paris, 2010).
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One of the striking features of today’s global policy landscape is the widespread prevalence of preferential trade agreements (PTAs). As per the World Trade Organization’s (WTO) o¢cial web- site, as of 2011, all but one of the WTO 153 members is a party to at least one PTA (Mongolia is the exception), and on average each WTO member country belongs to 13 PTAs. We even observe today that PTAs are in discussion with each other regarding mutual liberalization. While the existing customs unions involve some of the major economies of the world, Free Trade Areas (FTAs) constitute an overwhelming majority of PTAs, accounting for 83 percent of all PTAs. 1 Since FTA members individually impose optimal tari¤s on non-members, a member country of a bilateral FTA is free to form an independent bilateral FTA with an existing non-member and create a hub and spoke type trading regime. 2 For example, Mexico, as a member of North American Free Trade Agreement (NAFTA), has FTAs with the European Union (EU), European Free Trade Association (EFTA), Chile, Israel, Japan, and many others. This di¤erence has important implications given the fact that countries belong to several PTAs in today’s world trading system. The goal of this paper is to contribute to the literature by deriving the individual and world welfare implications of hub and spoke regimes relative to global free trade under an oligopoly model of trade when costs are asymmetric. 3
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Brander and Spencer (1984) use a profit shifting argument to motivate optimal tari¤s. The higher the rents made by a foreign firm in the domestic market, the more scope there is for shifting rents to domestic citizens through the use of higher tari¤s. And because trading costs increase with distance, firms make higher rents in nearby markets than those that are further away. So in the absence of an agreement, optimal tari¤s are higher on imports from countries in the same region than on imports from countries of other regions. It follows that a bilateral free trade agreement (FTA) between two close neighbors brings about larger production and trade gains than between distant countries because the former entails a larger mutual tari¤ reduction.
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After Singapore had introduced its new emphasis on bilateral deals around the turn of the century, the Thai government followed soon thereafter. This policy shift has had negative effects on cooperation in ASEAN, and at the same time has been providing only limited gains. Nevertheless, the early harvest program – part of the ASEAN-China FTA – received a lot of attention, primarily because it was the first bilateral trade measures that China implemented after joining the WTO. The Chinese immediately opened their market for Thai agricultural products, which in the first six months of 2004 resulted in an increase of vegetable exports to China of 38 percent and of fruit exports of 80 percent (Hufbauer and Wong 2005: 8). 16 Other agreements, however, show a great degree of protectionism. On 1 September 2005, Thailand concluded a free trade agreement with Japan. This deal is another example of the lack of free trade in the bilateral agreements in the Asia -Pacific. Rather than liberalising comprehensively, even if it is limited to bilateral trade, Japan and Thailand agreed not to hurt each other too badly. Thailand’s automobile industry, which developed relatively well in recent years, continues to be protected against Japanese competition. For example, the tariff for cars with more than 3000 cc engine capacity has been reduced from 80 to 60 percent, whereas the level of protection for cars with smaller engines, i.e. the majority of cars, remains unchanged. Japanese steel producers will not get duty free access to the Thai market before 2015. As to be expected, Japan has wanted to protect its agricultural sector. Rice, beef, wheat, dairy products and fish are excluded from the free trade agreement.
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 Gawande, K. and Bandyopadhyay. Is protection for sale Evidence on the Grossman -Helpman theory of endogenous protection[J]. Review of Economics and Statistics, 2000(82):139-152.  Gawande, K; Sanguinetti, P and Bohara, A.K. Exclusion for Sale: Evidence on the Grossman and Helpman Model of Free Trade Agreements[M]. Manuscript, University of New Mexico, 2001  Grossman, G.M. and Helpman, E. The Politics of Free Trade Agreements[J]. American Economic Review. 1995(85):667-690.
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The accession of China to the WTO in 2001 had integrated China into the world economy. As estimated by the World Bank, China’s entry into WTO will increase its exports share in the world’s total exports by about 10% by 2020, second after the US, and above Japan. In terms of GDP expansion, China will contribute 8% of global output by 2020, right after US, which will contribute about 19% (Panitchpakdi & Clifford, 2002). China is poised to be the world’s second largest economy by 2020. The accession to the WTO and rising competition will possibly strengthen China’s competitive power and restrain other Asian countries’ price competitiveness further (Lo, 2003). Rapid industrial development, including trade expansion in China, particularly in export-oriented industries (EOIs) (Greenaway, Mahabir, & Milner, 2008), will in some way affect the growth of ASEAN economies. The majority of EOI- based products are mainly electrical and electronics (E&E) goods. Most of these goods belong to high and semi-technology industries that are capital intensive. E&E industries are no longer regarded as labour-intensive, even though the number of workers employed in the industries is high compared to other types of industries such as textiles and consumer non-durable goods. For the expansion of EOIs, ASEAN needs and depends on FDI. The E&E goods and transport equipment contributed to a large share of the total exports of China (Yao, 2008). In 2015, the E&E products sector comprised more than 35% of total exports and is a sector largely dominated by foreign firms (Zhao & Jiang, 2009).
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The Black Sea Trade and Development Bank (BSTDB) The plan to create a BSEC Bank was first mentioned in the summit declaration adopted in 1992. However, it took two more years to draft the agreement establishing the Bank which was then signed by the Foreign Ministers at their meeting in Tbilisi in June 1994. The purpose of the BSTDB, located in Thessaloniki, Greece, is to contribute effectively to the transition process of the Member States towards economic prosperity of the region and to finance and promote regional projects, trade activities, investment or development programmes and other banking services for the public and private sectors in the Member States.