free trade area

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.

Maudling, in agreeing that Britain was ready to negotiate for the inclusion of agricultural products in the Free Trade Area, said, "We want to have rules for trade in agricultural produc[r]

and regional agreements in the Arab w orld. “Among these numerous agreements which very often overlap each other in spaghetti regionalism, GAFTA is certainly the most far-reaching one. This is due not only because it covers all countries in the Arab region, but also because it relies on political institutions, such as the Gulf Cooperation Council and the Arab League. Moreover, the contents of the agreement are also far-reaching, first because it not only includes the removal of tariffs, but also monetary, administrative and quantitative NTBs (i.e. quotas). It also provides for the trade liberalization in agriculture (despite a transition period) as well as a precise set out of rules of origins ” ( Abedini and Peridy, 2008:851). More than 15 years after signing the Agreement on Facilitation and Development of Trade Among Arab States in 1981 by the members of the Arab League and to enhance its implementation, the member states signed an agreement to help create a Pan-Arab Free Trade Area in 1997 to be completed within 10 years. It came into force in January 1998. Later, the Arab Summit held in Beirut in March 2002 and the Economic and Social Council meeting held in September 2002 decided to reduce the transitional period for the implementation of the PAFTA to be seven years ending in January 2005. It was originally signed by Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. Currently Algeria and the Palestinian Authority of the West Bank and the Gaza Strip are also members of the PAFTA.

Some experts and scholars set up economic models to empirically analyze the trade effects of China-ASEAN Free Trade Area. For example, Roberts [3] col- lected trade data of China and ASEAN countries before and after the start of the free trade zone, established a corresponding econometric model, and analyzed the trade transfer and trade creation effects between China-ASEAN Free Trade Area member states and between China and major trading nations in China. The conclusions prove that China and ASEAN are closer in terms of per capita in- come and demand, so the amount of trade between them is also greater; Chen Hanlin, Tu Yan [4] through the development of bilateral trade between China and ASEAN Introduced and established a trade gravity model, from the perspec- tive of China, they analyzed the static effects of the China-ASEAN Free Trade Area. The conclusions proved that China’s creative effects were smaller than the trade diversion effect, and the difference between the two effects was also con- stant over time. Park [5] established a related econometric model by introducing the theory of Customs Union and other factors, analyzed the factors of tariff structure and trade type before and after the establishment of China-ASEAN Free Trade Area, and pointed out the establishment of China-ASEAN Free Trade Area can promote trade creation effects among member states, and at the same time, they also thought that non-economic factors can increased the effi- ciency of economic development of the FTA.

Abstract: One of the bitter legacies of colonialism in Africa is the creation of small unit states which reduced the singular and collective competitiveness of the states and the continent respectively in global economic and political affairs. It has therefore been the resolve of African leaders to pursue some forms regional integration in order to overcome the challenges. Consequently, from the pre-independence pan-Africanist philosophy, to the Organization of African Unity, OAU and today the African Union, this fundamental goal of building integration mechanisms has remained prevalent at the regional and sub- regional levels, leading to the desire to establish integration schemes for customs’ union, economic community, common currency, central bank and one parliament, and most currently that of the Free Trade Area in the Continent. This article sought to unpack some of the challenges of regional integration in general and those facing the AU’s continent-wide Free Trade Area and found that, though efforts towards regional integration in Africa have recorded some achievements including positive economic growth, they still fall short of achieving most of its laudable objectives especially in the face of such challenges ranging from over-ambitious targets, to the heterogeneity of the economies of members, among others. For effective regional integration in Africa, AU should basically resolve the identified knotty challenges that have frustrated a possible beneficial intra-regional trade which could subsequently lead to regional integration in Africa without which the drive for collective self- reliant development for Africa will always turn into a mirage, deepening the region’s dependence on the western powers.

In Chapter V Vaillant and Ons focus on the characteristics of the political economy of an FTA of this kind. With this objective, they develop a methodology that allows them to study the welfare effects of a bilateral agreement by identifying the sectors that would encounter the most prob- lems and those that would be most favored by a trade agreement. A gen- eral typology of the changes under different protection regimes in an eventual free trade area between the United States and MERCOSUR is developed (enhanced protection versus reduced protection and trade diversion versus trade creation). This methodology utilizes data on trade and production, and it allows the typology of goods in each of these cat- egories to be determined empirically. The work is carried out at a high level of disaggregation so as to be able to identify the reciprocal sensitive sectors. The results constitute an objective base for analyzing the lists of exceptions that the trade agreement would entail.

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,

Since many regional trade agreements appeared to facilitate trade and spur economic growth, this paper aims to examine whether or not the purchasing power parity (PPP) hypothesis for regional agreements has been satisfied. Besides assessing the validity of PPP, the current study intends to verify if the integration process among countries of a free trade area (FTA) has brought a convergence among the exchange rate and inflation.

The need to create a free trade area covering the EU and the US has been discussed on both sides of the Atlantic since the early 1990s. It has been expected that the removal of barriers to trade and investment between the EU and the US will lead to more dynamic economic development, will contribute to the decline in unemployment and will increase prosperity in the contracting coun- tries. The first negotiations on TTIP were taken in 1995 and further in 1998 and 2007. They all, how- ever, ended in failure. The agreement on the liberalization of trade in goods and services between the EU and the United States has not been signed mainly due to the conflicting positions of the ne- gotiating parties on agricultural trade and sanitary and health insurance standards (Wódka, 2013). Despite setbacks in negotiations, at the EU-US Summit on November 28, 2011, the Transatlantic Economic Council (TEC) was directed to establish a High-Level Working Group on Jobs and Growth. It was headed by Ron Kirk – US Representative for trade and Karel de Gucht – EU Trade Commissio- ner. Its task was to identify opportunities to improve bilateral trade and investment relations between the EU and the US. For this purpose, it established cooperation and held consultations with all stake- holders, including the major European and American business associations. In February 2013, the Working Group published the final report outlining the future agreement on the EU-US trade. In February 2013, in a joint declaration, President Barack Obama and President of the European Commission J.M. Barroso strongly supported the creation of a free trade area between the two economic powers. However, at the request of France, it was decided to exclude from negotiations issues related to music and film production.

people, ASEAN is a region of global economic importance that the EU cannot afford to neglect, especially at a moment when the trade balance is in favor of ASEAN. Surely, the establishment of a free trade area would significantly benefit the Europeans, as seen in Figure 1. Due to the quality requirements, property rights and other regulations on which the EU has the upper hand, there are enough reasons to believe that once the FTA is established, the trade balance will change.

The idea is to identify the private interest groups that are for or against the trade arrangements between the United States and the MERCOSUR countries. The importance of explicitly introducing the list of products to be excluded from the negotiations has been pointed out in the modern literature on the political economy of trade policy (Grossman and Helpman 1995). From this perspective, the exceptions list improves the chances of signing an FTA because it makes it more palatable in political terms. The general results of these models are summed up by the fact that the ideal exceptions list of each partner is like an index of the compara- tive advantages of the other. As Grossman and Helpman (1995) explained, the conditions needed for the political viability of an FTA may contradict those that ensure its social desirability. The industries with more potential for trade creation, for which the FTA implies an improvement in welfare, are those in which there will be more resistance in the import substitu- tion country to accepting their inclusion in the agreement.

While recognizing the overall goals of free trade, given the unique international market, where only two states in the world produce the vast majority of the world’s orange juice, any reduction in the citrus tariff will not lead to the stated objectives of free trade, including greater competition and consumer choice, lower prices, or expanded global economic growth. Rather, a reduction in the current citrus tar- iff would result in centralized consolidation of global citrus produc- tion within one region of the world and would create a monopoly-type market environment that would dramatically curtail international market competition and diminish consumer choice.

In contrast, the existing institutional infrastructure in East Asia and on the Pacific Rim is markedly primitive. It is fair to say that present-day East Asia is the least “regionalized” of the world’s regions (e.g., Lloyd, 1996). Although the idea of an East Asian “community” also dates back to the interwar period, it is embodied in the Greater East Asian Co-Prosperity Sphere, the geopolitical masterplan to replace Western imperialism with an Asian empire ruled by Japan. Indeed, all other pre-World War II institutional antecedents aimed to foster intraregional social and cultural exchange (e.g., the Pan-Pacific Union), rather than economic integration (Yamaoka, 1996). In fact, the oldest existing regional organization, the Association of Southeast Asian Nations (ASEAN), was formed in 1967 to address security concerns. Yet ASEAN did not produce a free trade agreement until 1992, and a common preferential tariff scheme among the seven member states will not be fully implemented until 2003 (Tan, 1997). APEC, the broadest and most ambitious regional institution on the Pacific Rim, was founded in 1989 and established a modest secretariat three years later. Even if APEC is able to keep to its current goal, the day of “free and open trade and investment” among the 18 member countries will not dawn until the year 2020. 6

gested that the United States should look at some variations of a free trade agreement to see if there are not ways of applying this approach to trade negotiations with[r]

Abstract The paper analysis the role Hemispheric Social Alliance network in its efforts to build a transnational coalition between labor unions, social movements, indigenous, environment[r]

America and the Government of Israel (Agreement) entered into force.' The Agreement is the first such agreement concluded by the United States 2 and consists of a [r]

Reluctance to liberalize trade is an ongoing concern of states that can only be overcame if the gains are visible and shared (FAO, 206). So, will the implementation of the FTA contribute to increase the intra-ECCAS trade? This question is particularly relevant due to the fact that regional cooperation and integration is considered since the independences of African countries, as an important opportunity for them to integrate the world’s economy (UNECA, 2012). According to the trade literature, regional trade integration offers both a response to the structural challenge of the narrowness of domestic markets and increase policy predictability (WTO, 2011). Regional integration may also help to achieve economies of scale and to strengthen supplies and competitiveness capacities by offering to companies the possibilities to access to the market of the neighbors (Gillson, 2010). Regional integration is considered as a training ground for better integration into the multilateral trading system. Based on the experience of the European Union, Political scientists have long been seen regional trade agreements as a key factor in regional political integration.

According to the U.S. exporters, the need to get a "transaction passport" (detailing information on, inter alia, the importer, contract details, local bank of importer/exporter, and a foreign partner) to clear goods has been highlighted consistently, which is marked as a significant impediment in the way of trade. The purpose of obtaining transaction passports is to stop the flight of capital and eliminate possibilities for money laundering by making importers show documents that verify the pricing of import/export transactions. In order to address the concerns of investors on the harshness of ―transaction passport‖, the National Bank of Kazakhstan (NBK) introduced new regulations in July 2006, which retained but simplified the transaction passport requirement. The elimination of the trade distorting maximum financing term of 180 days for imported goods, and transfer of the authority to issue transaction passports from customs to the NBK and commercial banks, were the principal changes brought about by the NBK. According to Kazakhstani regulations, the usefulness of transaction passports cannot be over-emphasised as it contains concise information on trade partners and includes a unique transaction code; specific payment information such as currency, means, and deadlines for payment; and complete contact information for contracting parties. Amendments to the Law on Currency Control, which seek to raise the ceiling on transactions requiring passports from $10,000 to $50, 000, are currently under the consideration of the NBK. (Ustr. Gov, 2010).

Hoekman’s estimates may not reflect the actual impediments because these measures are based on information contained in each economy’s schedule of GATS commitments. However, a lack of commitment to a GATS schedule does not necessarily mean that an economy imposes heavy restrictions. Many developing economies simply do not have available details that are required to meet the complexities of the GATS scheduling process and so leaves many industries unbounded, some of which may be quite open. Furthermore, Hoekman (1995) treats all commitments with equal weights and does not distinguish between barriers according to their economic impact, with minor impediments receiving the same weighting as an almost complete refusal of access. In summary, the guesstimates are very crude and rely on assumptions about the level of prohibitive benchmark tariff equivalents, which are arbitrarily determined by the researcher. In spite of these limitations of Hoekman’s approach, this paper uses the modified Hoekman’s guesstimates for the analysis on the economic effects of an FTAAP, since they provide worldwide trade barriers in services. In fact, Hoekman’s guestimates cover 15 of APEC’s member economies.

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).