Greater Trade Ties in Asia Pacific Demonstrates Stronger Economic Integration
Economies in Asia Pacific have witnessed a surge in free trade agreements (FTAs) since the 2010s, reflecting the region’s greater economic integration:
- One of the most prominent recent free trade agreements is the TPP, which involves 12 countries in Asia Pacific and Americas: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. While it is yet to be ratified, the successful conclusion of this agreement will create a huge free trade bloc, with a total GDP of US$28.0 trillion or 36.1% of the world’s total GDP in 2014, to benefit all members. The TPP is also thought to be a counter-balance to China, which tends to dominate trade in the Asia Pacific region.
- ASEAN has had an FTA since 1992. It has also concluded FTAs with Australia, China, India, Korea, Japan and New Zealand. Since 2012, ASEAN has been negotiating with its FTA partners to create a Regional Comprehensive Economic Partnership (RCEP). The RCEP will have broader and deeper engagement with significant improvements over the existing FTAs.
- Apart from multilateral free trade negotiations, the number of bilateral FTAs is also on the rise in Asia Pacific seen in July 2015 when China concluded a new FTA with Australia after a decade of negotiations. This adds to the country’s existing 12 FTAs, seven of which were with countries in Asia Pacific and Australasia. China is also negotiating an FTA with Sri Lanka.
- Japan has signed 15 FTAs as of August 2015 and 10 of which are with regional trading partners. Japan also wants to finalise a trilateral FTA with China and South Korea.
- Being an export-oriented economy, South Korea has also been active in pursuing FTAs with its key trading partners in the region. Apart from existing FTAs with ASEAN, Singapore and India, the country concluded in 2015 FTAs with Vietnam and China, while negotiating additional FTAs with Australia, New Zealand, Indonesia and Japan. Together with Pakistan, South Korea is likely to announce negotiations of a new FTA soon.
To learn more, download Euromonitor international’s white paper: “An Introduction to Regional FTAs in Australasian Markets: Business Perspectives from India and China” here: http://go.euromonitor.com/white-paper-introduction-regional-FTAs-autralasian-markets-business-perspectives-india-china.html