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Economic Growth and International TradeJapan and MalaysiaAnalysis of the various impacts of free trade and discovering examples of each of the economies under review and their relative success, we have come to the conclusion that “Free Trade” is one of the best available solutions to get ourselves out of the chaotic mess that we find ourselves in and there is a lot we can learn from our Asian counterparts on how they have used this weapon up their arsenal to establish themselves on the world stage.
2010
Submitted To: Mr. Akhtar LodhiSubmitted By: Muhammad Saiq Lakhani
Ali Bilawal Khan Faizan Shahzad
5/23/2010
Economic Growth and International Trade
Table of Contents
S.No. Contents Page #
1 Introduction 8
2 Benefits of Free Trade 9
3 Terms-of-Trade Effect of Growth 11
4Effect of Economic Growth on
International Trade11
5 Arguments against Free Trade 12
6 Impact of Free Trade on the World 13
7 Free Trade Agreements (FTAs) 19
8 Specific Advantages of promoting FTAs 20
9 Points to bear in mind in promoting FTAs 20
10 JAPAN
11 Introduction 21
12 Motivations for Free Trade 22
13 Japanese Growth 23
14 Challenges 24
15 MALAYSIA
16 Introduction 37
17 Statistics of Malaysian Economy 37
18 Tiger Economy 38
19 External Trade 39
20 Free Trade Efforts 40
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Economic Growth and International Trade
21 Major Imports and Exports 41
22 Export Commodities 41
23 Exports Partners 42
24 Import Commodities 42
25 Import Partners 42
26 Trade Relations with U.S. 43
27 Trade with U.S. 43
28 Top Exports to U.S. 43
29 Fastest Growing Malaysian Exports 44
30 Top Imports from U.S. 44
31 Fastest Growing Malaysian Imports 45
32 Comparative Trade Advantages 45
33 Challenges 45
34 Conclusion 46
35 References 44
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Economic Growth and International Trade
ACKNOWLEDGEMENT
First of all, we would like to thank Allah Almighty for giving us the opportunity to study in such a
prestigious institution and under the guidance of a brilliant faculty.
We would also like to thank our “Global Economic Environment” teacher, Mr. Akhtar Lodhi, for his
continued guidance and support for our topic and not least through out the semester.
We would also like to thank our families for bearing with us when we devote ourselves to the
project and become unavailable to them in the process.
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Economic Growth and International Trade
PREFACE
This report is primarily based on exploring the pros and cons of free trade by analyzing the impacts
of free trade on Asian power house i.e. Japan as a bench mark for Asia.
Moreover, this topic is also being viewed from the developing countries perspective including the
analysis of the economies of Asian Tigers with particular emphasis on Malaysia and Taiwan.
This report is aimed to enhance the understandings of the various impacts of free trade and the
relative success of the economies under study.
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Economic Growth and International Trade
RESEARCH POINT
In today’s era of fierce competition, there is very little margin of error when it comes to formulating
economic policies. If the policy frame work is not setup correctly, there is little chance the
economies would survive. This is evident from the innumerable impacts of free trade on the Asian
power house Japan and the developing economies of the Asian Tigers.
The appropriate frame work and policies of an economy becomes even more important in the case
of our country where there is acute shortage of natural resources and potential export bonanzas.
Therefore, our research is aimed to promote ‘better understanding’ of the various impacts that free
trade can have, their different implications, and to find out what lessons can we learn from the
economies under review.
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Economic Growth and International Trade
THESIS SENTENCE
After a thorough analysis of the various impacts of free trade and discovering examples of each of
the economies under review and their relative success, we have come to the conclusion that “Free
Trade” is one of the best available solutions to get ourselves out of the chaotic mess that we find
ourselves in and there is a lot we can learn from our Asian counterparts on how they have used this
weapon up their arsenal to establish themselves on the world stage.
7
Economic Growth and International Trade
INTRODUCTION
The act of opening up economies is known as "free trade" or "trade liberalization." It usually
benefits the larger, wealthier countries whose big companies are looking to expand and sell their
goods abroad. In the one sector where developing countries have the most to gain - agricultural
goods - wealthier countries maintain the highest level of "protection" of their own markets.
Globalization has made the world a much smaller place. Global trade refers to the act of buying and
selling goods and services between countries. Today these goods and services can travel further
and faster so that - for instance - products from all over the world can be found at your corner
shop. This can be anything from fruits and vegetables, to cars, banking services, clothing, and
bottled water.
The scale and pace of this kind of trade has only increased over time, and has become a very
powerful tool. International trade is considered a prime driver of how well a country develops, and
affects very much how well the economies of different countries are doing.
The act of opening up economies is known as "free trade" or "trade liberalization." Trade
liberalization means opening up markets by bringing down trade barriers such as tariffs. Doing this
allows goods and services from everywhere to compete with domestic products and services but in
practice the set-up of global trade rules and the way they are administered by the World Trade
Organization, works best for those countries who are already rich, and increases the gap between
them and poorer countries who are already struggling to compete. The part of the problem is that
trade is not always equal. It is not just a tool - it can also be a weapon. When countries put
restrictions, such as tariffs, on goods from other countries, imported goods become more expensive
and less competitive than goods from their own country. Another thing that can be done is
subsidizing domestic businesses. This means that governments give money or other forms of
support to local or domestic businesses, to make sure that they are cheaper over imported
products and services. This can allow unsuccessful and inefficient businesses to do well, since they
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Economic Growth and International Trade
receive all kinds of government support. And while these businesses continue to grow, smaller or
local producers, especially in many poorer countries - those that need support the most - are being
destroyed.
Any measure like this is called "protectionist," since it has the effect of closing off a country's
markets to goods from other countries. Many wealthy countries in Europe, as well as the US and
Japan use these tactics to support their own domestic economies, making it impossible for smaller,
or less developed countries to gain a foothold in the global marketplace. As they go about
protecting and closing off their own markets, many of these very same countries are creating
double standards, by forcing other countries to open up their markets.
Free trade is a complex concept-it can at least be classified according to the geographic areas in
which it applies, and for whom it applies. Small world's networks modeling have demonstrated that
preferred locations have a clustering and concatenation effect such that location confers
advantages that aren't a consequence of better business intelligence or invention. In global trade
with trans-nationally assembled products the local and small business perhaps has a permanent
disadvantage and the global business the preferred location. Free trade disadvantages nations and
good citizens and promotes the trans-national and irresponsible capitalist class without regard to
the environment's harm or the reduction in the quality of life for the populace in some cases-for
the quest for a pecuniary sort of profit in business may regard government as a hindrance and the
best interests of a nation and its people as concepts of a leftist nature.
BENEFITS OF FREE TRADE
The Theory of Comparative Advantag
This explains that by specializing in goods where countries have a lower opportunity cost, there can
be an increase in economic welfare for all countries.
Reducing Tariff Barriers Leads To Trade Creation
Trade creation occurs when consumption switches from high cost producers to low cost producers9
Economic Growth and International Trade
Increased Exports
As well as benefits for consumers importing goods, firms exporting goods where the UK has a
comparative advantage will also see a big improvement in economic welfare. Lower tariffs on UK
exports will enable a higher quantity of exports boosting UK jobs and economic growth.
Economies of Scale:
If countries can specialize in certain goods they can benefit from economies of scale and lower
average costs, this is especially true in industries with high fixed costs or that require high levels of
investment. The benefits of economies of scale will ultimately lead to lower prices for consumers.
Increased Competition.
With more trade domestic firms will face more competition from abroad therefore there will be
more incentives to cut costs and increase efficiency. It may prevent domestic monopolies from
charging too high prices.
Trade is an Engine of Growth
World trade has increased by an average of 7% since the 1945, causing this to be one of the big
contributors to economic growth.
Make Use of Surplus Raw Materials
Middle Eastern counties such as Qatar are very rich in reserves of oil but without trade there would
be not much benefit in having so much oil. Japan on the other hand has very few raw material
without trade it would be very poor.
Tariffs May Encourage Inefficiency
If an economy protects its domestic industry by increasing tariffs industries may not have any
incentives to cut costs.
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Economic Growth and International Trade
TERMS- OF- TRADE EFFECT OF GROWTH
The terms of trade have an inverse relationship with the volume of trade and are by no means
beneficial for the growth and development of international trade or local economy for that matter
EFFECT OF ECONOMIC GROWTH ON INTERNATIONAL TRADE
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Economic Growth and International Trade
ARGUMENTS AGAINST FREE TRADE
Infant Industry Argument:
If developing countries have industries that are relatively new, then at the moment these industries
would struggle against international competition. However if they invested in the industry then in
the future they may be able to gain Comparative Advantage. This shows that comparative
advantage can change over time. Therefore protection would allow them to progress and gain
experience to enable them to be able to compete in the future.
The Senile Industry Argument:
If industries are declining and inefficient they may require large investment to make them efficient
again. Protection for these industries would act as an incentive to for firms to invest and reinvent
themselves. However protectionism could also be an excuse for protecting inefficient firms
To Diversify The Economy:
Many developing countries rely on producing primary products in which
they currently have a comparative advantage. However relying on agricultural products has several
disadvantages
Prices can fluctuate due to environmental factors
Goods have a low income elasticity of demand. Therefore with economic growth demand
will only increase a little
Raise revenue for the govt.
Import taxes can be used to raise money for the govt however this will
only be a small amount of money
Help the Balance of Payments
Reducing imports can help the current account. However in the long term this is likely to lead to
retaliation
Cultural Identity
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Economic Growth and International Trade
This is not really an economic argument but more political and cultural. Many countries wish to
protect their countries from what they see as an Americanization or commercialization of their
countries
Protection against Dumping
The EU sold a lot of its food surplus from the CAP at very low prices on the world market. This
caused problems for world farmers because they saw a big fall in their market prices
Environmental Factors
It is argued that free trade can harm the environment because LDC may use up natural reserves of
raw materials to export. Also countries with strict pollution controls may find consumers import the
goods from other countries where legislation is lax and pollution allowed. However supporters of
free trade would argue that it is up to individual countries to create environmental legislation.
IMPACT OF FREE TRADE ON THE WORLD
The free market has been lauded as a hallmark of a democratic and free society. G-8 countries
convene every year, discovering ways to spread the good news of this economic gospel.
Domestically, the free market promises that the good life could be held by all if one would just work
hard enough at his dream. Yet not all seems to be rosy with this dream. On an international and
domestic level, the free market has not given the liberation it has promised. In some ways, it has
only cemented the inequality already there.
This same economic story could be told in Indonesia, where the Chinese only account for three
percent of the population yet control seventy percent of the economy. Liberation of Indonesia in
1998, which the US hailed as a grand celebration for democracy and free markets, only served to
spark the violence in Indonesia that still continues until this day. One way to explain this
phenomenon is that since the Indonesian natives were never accorded dignity, they used their
initial days of freedom to express the violence that had been brewing for so long, much the same
way an adolescence rebels when he finds freedom from an oppressive family. Yet all the violence
and all the rhetoric of freedom spinning have still not given either the Filipinos or the Indonesians 13
Economic Growth and International Trade
economic destiny. Global financiers still hold prime real estate and control the markets within the
region.
On the American domestic front, much of the same reality takes place as overseas. Companies
feel that they are generous when they start out paying a dollar or two above minimum wage,
saying that teenagers who live at home take many of these jobs. While this is true, many of these
teenagers are not saving up for a car as much as needing the job to help subsidize their families.
And many more of these people who live at minimum wage are not teenagers without children, but
teenagers and adults with dependent children to support. Generally speaking, three hundred
dollars a week before taxes does not provide for the necessities of life in any part of the country;
very few regions of have living wage laws. And while people like Bill O'Reilly legitimately claim to
pay a higher amount of taxes when they file to the government, the working poor are subject to the
same sales tax that the affluent are. A man making $100,000 a year may congratulate himself on
being frugal by buying shampoo at the bulk discount store, but the same two dollar shampoo may
be a "splurge" for the man on minimum wage because he can afford nothing more. Both pay the
same amount in sales tax, regardless of who can afford it more.
The answer to the free market problem is not necessarily to destroy it and replace it with socialism.
Switching economic styles may just shift the same problem into different squares; the economic
oppression may just go from an individual entrepreneur to the government itself, accomplishing
nothing. Adding to this, the rich, even in a socialist economy have the money to lobby the
government, much like is under capitalism, so then all has changed is the semantics.
What needs to be done is to introduce a sense of fairness and morality to the global market, and a
reality check that recognizes where the free market exacerbates the innate prejudices already
present. Throwing a few dollars at the problem and declaring elections will do little to change the
climate when greed rules the marketplace. In the case of the international market, those who
employ natives need to be more generous in their application of economics, for example, making
sure that their employees are treated with respect. Those who are doing international business
would need to see the people they are employing as equal human beings who have just as much
standing as they do in the human scheme of things, and not as a lesser racial or ethnic group.14
Economic Growth and International Trade
In the case of the domestic market, much of the same principle applies. Those who are in the
highest corporate echelons need to reprioritize what it means to be successful, and be willing to
divert some of the profits from making their corporation bigger to the coffers of their employees.
Middle class consumers may become more conscientious in their buying as some of the cost is
diverted to them, perhaps limiting resources exploited for consumer purposes, but if one considers
his fellow man to be his brother, a higher price that makes sure his brother is fed well will not be as
bothersome.
An exact distribution of moneys is not necessary, and may not even be feasible without major
outside control factors, illogical to employ in a free society. But a decent living wage for all people is
only moral. In this respect, when the lessons of fairness and regard of others as equal human beings
worthy of dignity takes place, perhaps the golden dream of free market can work its wonders.
Free trade needs to be placed within a rational context regarding to what ends it serves and how
well it serves those ends. Free trade isn't the same in all times and places. If the Kennedy's or the
Bushes of the world war one and two eras freely traded with the Nazis of Germany that would have
been a disadvantage to the national interests of the people of the United States that opposed
fascism in Europe, while trading with Germany today is more of an advantage for Americans
because BMW will produce a better electric car than Chevy next year very most likely, and quiting
reliance on fossil fuels for transportation is a way to decrease trade deficits and keep cash in the
United States for investment here. Free trade and capitalism cannot replace democracy and good
government of the people, by the people and for the people, yet if a government does support and
reinforce a national democracy free trade can be one way of creating comparative advantage
internationally and of course domestically.
Free trade does not develop on an even field globally. Free trade, free speech and other civil
rights develop at a differential rate. The founders would not have demonstrated a fascist's
disregard for democracy within secure boundaries as do the corporatist spawn bought and paid for
in the U.S. Congress. Sycophantic stooges of international stooges are to rave, collectivist and hip to
enjoy a nation and democracy responsibly and will seal their own probable national doom as have
many prior civilizations and nations sated with gluttony and dulled too much for rational political 15
Economic Growth and International Trade
intelligence. 'Talk' radio is itself a spoiler for corporatist power advancing corrupted ideas to be able
to add the conservatives to the liberals in the globalist, collectivist's pockets.
Capitalism is fine when democracy still exists as a rational government defending a nation's vital
public interests, but when corporations and corporate values dwarf and purchase the government
irrational profit motives replaces government and national interests dry up deleteriously replaced
by ad hoc elite class collectivists exploiting the world like crazed thirsty camels chasing water holes
in a broadening period of global warming.
IMPLEMENTATION OF FREE TRADE
The biggest misunderstanding underlying the concept of "free trade" is that free trade has to
somehow be implemented or instituted, usually by the state. This is the polar opposite of the truth:
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Economic Growth and International Trade
free trade is the natural state of humanity. Free trade can only be taken away or diminished; it
cannot be somehow enhanced or magnified.
We are born on this earth to engage in free trade and exchange. The ignorance of this basic fact is
evident in the belief that states or nations must go through some great process or sign elaborate
treaties and documents to institute free trade. This is equivalent to some government declaring
that all citizens now have the right to "free air". Treaties and documents seek to control and limit
trade, not to enhance it.
In collusion with these misunderstandings is the idea that "nations" engage in free trade. Again, this
is as far from reality as is possible. The idea that large "corporations" engage in and promote free
trade is connected to this same principle. Multinational corporations usually engage in controlled
and planned trade immediately after the signing of such documents. Free trade agreements are
almost always promoted to encourage controlled trade and benefit multinational corporations.
True free trade is simply unbridled and consentual exchange between two or more humans. This
can involve their time as labor or some product of their labor. This type of free trade or exchange
has probably been going on since day one. No documents or treaties are necessary to complete this
simple and natural transaction. The world didn't somehow become complicated and therefore
necessitate copious paperwork to ensure free trade. Paperwork, documents or treaties are always
limitations on what humans do naturally on the earth, engage in exchange. Free trade is defined
fundamentally as unrestrained exchange free of force, either internal force within the exchange or
external force. If we accept this definition, then any treaty, agreement or document is an "outside
force" limiting the scope or "freedom" of the exchange or trade.
Promotion of free trade is always an oxymoron. Free trade cannot be "promoted", as it already
exists in our natural state. However, controlled and forced trade certainly can be promoted in many
ways. As mentioned, treaties and documents seek to control and promote certain types of
exchange in order to benefit some and disadvantage others. This is always a loss of overall
exchange freedom, not a gain. To understand this, we must clearly view the fundamentals of trade
or exchange. All exchange and trade originates locally. We trade first with those closest to us. It is
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Economic Growth and International Trade
free economic principles that govern this. It always takes more energy to trade with those further
away. Because of this, products that are further away must have more value than comparable local
products. The cost of transport must be accounted for. If this principle of locality is allowed to
freely develop, exchange and distribution of products would organize balancing ease of production
and distance from markets.
Every product would be produced and distributed in its most efficient manner. If the cost of
transport justified the greater ease of producing apples twenty miles from their final market instead
of five miles, this would occur. If it were somehow justified to produce, pack and ship an item
overseas and transport the products on a boat to some distant and strange foreign land, this would
also occur. But, this transport over great distances must also be examined for its role in a true free
trade.
Free trade to actual is "free" must also be free of subsidy or coercive promotion. Subsidy is the
forced collection of funds through taxation and the insertions of those same funds into economic
transactions. This can take the form of actual payment or some tax break. A tax break has virtually
the same effect as a delayed payment. Price can be supplement or discounted through subsidy.
Whatever form it takes, it violates the freedom of the taxpayer, who if given the choice would most
likely not partake in the trade or transaction and violates freedom of trade by advantaging one
party and disadvantaging another.
However, the vilest and most unrecognized form of subsidy limit freedom of trade is that of
transportation. As we mentioned, free trade organizes itself naturally based on locality. Any forced
collective input into transportation destroys this basic principle. Whenever a road or bridge is built
out of public funding, freedom of trade is thwarted. It is true that public transportation
infrastructure promotes a form of trade. It, much like trade agreements and other subsidies,
promote "controlled" trade. Trade becomes based on proximity not to local consumers, but to
public transportation. Access to highways, publicly built airports and ports becomes more
important than what products are needed locally. In fact, local demands are put aside to satisfy
foreign markets. We are all aware of local products being unavailable while the shelves are stocked
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Economic Growth and International Trade
with far away items produced thousands of miles away. This is not an example of free trade but
rather controlled and subsidized trade.
In doesn't take a genius to realize that something is amiss when locally produced lettuce sells for
twice what a head grown in South America and transported by truck, airplane and again by truck to
our local shelves. The true costs, transportation and otherwise, have been socialized and the
result cannot be referred to as "free trade". All this simply points out the fact that trade has
become a "commodity", much like everything else. Trade or the rights to trade is bought and sold,
molded and determined by agreements, laws and subsidy.
The heart of trade, the product, takes a back seat to the requirements and restrictions of the
transaction. The foundation of free trade, locality, becomes subordinate to the political "position"
of the trade partners. What was originally free and available to all of us, the free exchange of
products and labor with others, has become marginalized and distributed by those in control of
trade to those they seek to advantage. It seems the more any concept related to freedom is
espoused upon and pronounced loudly publicly, the less there really is of it!
FREE TRADE AGREEMENTS (FTAs)
Amid the advance of economic globalization, it is important to maintain and strengthen the free
trade system. While the World Trade Organization continues to play an important role in this effort,
free trade agreements (FTAs) offer a means of strengthening partnerships in areas not covered by
the WTO and achieving liberalization beyond levels attainable under the WTO. Thus, entering into
FTAs is a highly useful way of broadening the scope of Japan's economic relationships with other
countries.
The European Union and the United States have pursued policies oriented both toward
negotiations under the WTO and the creation of large-scale regional trade frameworks. The current
round of WTO negotiations could be the last multilateral trade negotiations prior to the creation of
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Economic Growth and International Trade
these large-scale integrated regional frameworks. It is necessary for Japan as well to address not
only WTO negotiations but also FTA trends in strengthening its economic relationships with other
countries.
SPECIFIC ADVANTAGES OF PROMOTING FTAs
Economic Advantages
FTAs lead to the expansion of import and export markets, the conversion to more efficient industrial structures, and the improvement of the competitive environment. In addition, FTAs help reduce the likelihood of economic frictions becoming political issues, and help expand and harmonize existing trade-related regulations and systems.
Political and Diplomatic Advantages
FTAs increase Japan's bargaining power in WTO negotiations, and the results of FTA negotiations could influence and speed up WTO negotiations. The deepening of economic interdependence gives rise to a sense of political trust among countries that are parties to these agreements, expanding Japan's global diplomatic influence and interests.
POINTS TO BEAR IN MIND IN PROMOTING FTAs:
Conformity with the WTO Agreements
Three points must be ascertained. First, the duties and other regulations of commerce should not be higher or more restrictive than the corresponding duties and other regulations of commerce prior to the formation of the FTA. Second, they must eliminate duties and other restrictive regulations of commerce with respect to substantially all the trade. Third, they must ensure completion of RTAs within a 10-year period, at least in principle. The reference to "substantially all the trade" implies that countries must achieve a standard of liberalization that compares favorably to international standards in terms of trade volume (based on the figures reported, the NAFTA average is 99%, while the average for the FTA between Mexico and the EU is 97%).
Impact on Domestic Industries
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Economic Growth and International Trade
A country cannot secure the advantages of FTAs without enduring some pain arising from the opening of its markets, but this should be regarded as a process that is necessary for raising the level of Japan's industrial structures. Unavoidable issues will emerge concerning various areas of regulatory control, including movement of natural persons, as well as the opening of markets and the implementation of structural reforms in the agricultural sector. With due respect for political sensitivities, unless a stance is taken linking FTAs to economic reforms in a country, it will not succeed in making them a means of improving the international competitiveness of itself as a whole.
JAPAN (THE ASIAN POWER HOUSE)
INTRODUCTION
Japan’s trade policy has historically centered on multilateral negotiations and dispute resolution
mechanisms. The rules of the General Agreement on Tariffs and Trade (GATT) and the World Trade
Organization (WTO) have provided Tokyo an ability to interact with its trade partners on an equal
basis. Given its global trade interests, a contentious bilateral past with the United States, and
historic legacy with Asian countries, particularly Korea and China, reliance on the multilateral
system has helped promote Japan’s trade interests. Over the past five years, Japan has shifted
course somewhat by pursuing negotiations in the WTO but by also seeking free trade agreements
(FTAs) and Economic Partnership Agreements (EPAs) with mostly Asian countries. An FTA is an
agreement between two countries or regional groupings to eliminate tariffs and other trade
barriers, while an EPA goes further by also attempting to facilitate the free movement of people
and capital among the partners to an agreement. Nonmembers find their exports discriminated
against. As a practical matter, officials at Japan’s Ministry of Economy, Trade, and Industry (METI)
acknowledge that there is little difference between an FTA and EPA. METI, however, prefers the
EPA label based on the view that it does less to provoke domestic political opposition than the “free
trade” moniker. The pursuit of FTAs is occurring worldwide with nearly 300 estimated to be
currently in effect. The United States has an extensive FTA program and agenda, and has FTAs in
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Economic Growth and International Trade
effect with two Asian-Pacific countries — Singapore and Australia. Europe has been pursuing a
similar course for years. China and six ASEAN states (Thailand, Malaysia, Indonesia, Philippines,
Singapore, and Brunei) are in the process of establishing an FTA by 2010. Now Japan is trying to
catch up.
Economists still disagree about the merits of negotiating FTAs on the grounds that discrimination
may undermine the multilateral trading system while others believe that FTAs promote multilateral
deals in the long run. The concern is that FTAs could lead to a “spaghetti bowl” of overlapping
conflicting trading partnerships each with its own set of rules at the expense of a more unified and
non-discriminatory set of multilateral rules. But domestic support in Japan for an FTA program
appears strong. Prime Minister Koizumi is firmly behind the approach, as well as the ruling LDP-
Komeito coalition. While the Democratic Party, the major opposition party, supports the general
thrust of the policy, some members maintain that the United States and China should be
considered as prospective FTA partners. Given its own aggressive FTA program, the United States is
hardly in a position to criticize Japan’s new policy orientation. But it has considerable interest in
whether Japan’s policy evolves in a manner that is supportive of U.S. interests in Asia — which
include promoting a stable Balance of power and insuring that U.S. trade and investment interests
are not discriminated against in the region.
MOTIVATIONS FOR FREE TRADE
Japan’s FTA program has been motivated by a combination of economic and political objectives.
The most important entail avoidance of becoming isolated as other major trading countries actively
pursue FTAs, energizing domestic economic activity, and promoting Japanese influence in Asia.
Japan’s concern about the possible emergence of economic blocs in the Americas and in Europe
goes back to the early 1990s. In 1994 the United States entered into the North America Free Trade
Agreement (NAFTA) and announced plans to create a Free Trade Area of the Americas. Europe at
the same time was busy entering into preferential trade agreements and subsequently has come to
conduct trade relations on a multilateral or non-discriminatory basis with only a handful of trading
partners, including Japan and the United States. In 1999 the collapse of multilateral trade
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Economic Growth and International Trade
negotiations at the WTO Ministerial in Seattle shook Japanese confidence in the future of
multilateralism. China’s decision in 2001 to negotiate an FTA with ASEAN countries was also a
seminal event, providing more ammunition for those in Japan that were advocating a change of
policy course. The case for developing an FTA program was also driven by Asian economic trends
and opportunities. METI officials see East Asia as the fastest growing region in the world and a
region that is increasingly vital to Japan’s economic future.8 FTAs and EPAs are viewed as one way
to deepen economic ties with East Asia and facilitate a new division of labor and production
sharing. The experience of the European Union has demonstrated that, as institutional integration
develops, so too does intra-regional division of labor that leads to a more effective production
network and to more efficient industrial structures. As a result, METI maintains that both individual
parties to an FTA, as well as the region as a whole, can enjoy more robust economic growth
powered by an expansion of exports and imports. Reform-minded METI officials also hope that an
aggressive FTA-EPA program will serve as a force for promoting domestic agricultural reforms. By
entering into negotiations with trading partners that continue to demand liberalization of Japan’s
protected agricultural sector, it is hoped that domestic support for programs that might aid farmers
transition to a less protected environment would be proposed and implemented. Finally, many
decision makers see FTAs providing Japan with varied political and diplomatic advantages. These
ranges from increasing Japan’s bargaining power in WTO negotiations to helping Japan better
compete with China for influence in Asia. Under the view that FTAs symbolize special relationships
based on political trust, Japan hopes to bolster its diplomatic influence on a range of political and
security issues.
JAPANESE GROWTH
More than a decade ago, there was concern in the United States that Japan was an economic threat
because its economy was too strong. Subsequently, U.S. policymakers have come to believe that
Japan is more of a problem when its economy is weak. A lackluster growth position in Japan not
only affects U.S.-Japan trade and financial ties adversely, but also undermines growth of the East
Asian economy. Moreover, an economically strong Japan is needed to serve as a counterweight to a
rising China. Despite regaining a good deal of financial stability in recent years, Japan’s economy
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remains weak. With growth projections of no more than 1.3%-1.6% over the next five years, Japan
will not be in a position to play much of a locomotive role either for the United States or the region.
This assessment is not likely to be altered by the estimated weak impact of Japan’s FTA program on
growth. Lagging China in FTAs with Asian countries, as well in other trade and investment linkages,
Japan currently cannot be said to be moving rapidly to establish itself as a credible counterweight
to a rising China.
CHALLENGES
Japan’s ability to promote its economic interests through an aggressive FTA/EPA program is
constrained by protection of its agricultural sector and rigid immigration policies. While the
FTA/EPA negotiations themselves provide pressures for more open policies, the ministries charged
with these portfolios (Agriculture and Justice, respectively) have not yet advanced effective reform
policies that would make a substantial difference.
Agriculture:
Agriculture accounts for only 1.3% of Japan’s GDP and 4.6% of its total employment, but remains
heavily supported and protected from import competition. According to the OECD, support to
producers as a percent of gross receipts was 58% in 2002-04, down from 61% in 1986-1988, but still
almost twice the OECD average. Rice, wheat, other grains, meat, sugars, and dairy are the most
heavily supported commodities. Tariff-rate quotas are employed to shield these commodities from
international competition, resulting in food prices that in Tokyo are on average 130% higher than
the rest of the world. Many in Japan believe that support for agricultural protection will disappear
over time. They cite the declining share of the population engaged in agriculture and the high
percentage of farmers (60%) who are over 65 years old and who derive the majority of their income
from non-agricultural activities. In the process, the hold of the agricultural lobby is said to be
slipping as evidenced by the slippage of the LDP in the 2004 Upper House election.33 The LDP
derives most of its support from rural areas, in part, due to Japan’s disproportionate electoral
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districting system; each rural vote is worth an estimated 2 urban votes. However, policy reforms to
help move Japan away from considerable agricultural protection have been slow to materialize.
While the Ministry of Agriculture, Forestry, and Fisheries has released papers that have raised the
idea that Japan should stop wasting resources on crops that can be imported more cheaply, little
follow-up has occurred. These reports advocate consideration of policies that would increase
competition in the sector by encouraging new entrants and providing direct compensation to
farmers through tax incentives in lieu of price controls and high tariffs. In large measure, this is due
to opposition from influential members of the LDP’s “farm tribe.” In the absence of a substantive
reform plan to make Japan’s farm sector more efficient, agriculture is bound to continue to be a
major stumbling block for concluding economically meaningful FTAs/EPAs.
Immigration
Among industrial nations, Japan maintains the tightest policy towards accepting foreign workers
and remains extremely cautious about changing course. However, due to a declining birthrate and
an aging workforce, Japan’s decision-makers are under increased pressure to accept more foreign
workers to keep the economy from stagnating. The demands of FTA negotiating partners such as
the Philippines and Thailand to liberalize Japan’s labor market prohibitions have brought added
pressures and debate about a more open door policy. A 1999 government employment plan called
for Japan to promote foreign employment in “specialized and technical areas,” but a “careful
approach based on national consensus” towards manual workers. Despite the needs in certain
sectors to accept more foreign workers, such as nurses and care providers, public support is lacking.
Concerns about increased crime rates, the social costs of accepting more foreigners, and an adverse
impact on Japanese homogeneity tend to dominate, along with the resistance of labor unions. In
addition, neither the LDP nor the Democratic Party stands clearly in favor of liberalizing
immigration. The significance of the immigration issue transcends the problems it creates for Japan
reaching closure on FTA negotiations with its Asian partners, such as Thailand and the Philippines.
The continuation of exclusionary immigration policies may also undercut Japan’s ambition to play a
leading role in a more integrated and interdependent Asian economy.
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26
Economic Growth and International Trade
The Share of Asian Economies in Japanese Trade
27
Economic Growth and International Trade
The Structure of Japanese Exports to Asia
The Structure of Japanese Imports from Asia
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Economic Growth and International Trade
29
Economic Growth and International Trade
The Impact of Trade Liberalization among Japan, China and ASEAN Countries
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Economic Growth and International Trade
31
Economic Growth and International Trade
32
Economic Growth and International Trade
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Economic Growth and International Trade
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Economic Growth and International Trade
MALAYSIAINTRODUCTION
Malaysia is a growing and relatively open state-oriented market economy. The state plays a significant but declining role in guiding economic activity through macroeconomic plans. In 2007, the economy of Malaysia was the 3rd largest economy in South East Asia and 29th largest economy in the world by purchasing power parity with gross domestic product for 2007 estimated to be $357.9 billion with a growth rate of 5% to 7% since 2007. In 2009, the nominal GDP was US$207,400 billion, and the nominal per capital GDP was US$8,100.
The Southeast Asian nation experienced an economic boom and underwent rapid development during the late 20th century and has a GDP per capita of $14,800, being considered a newly industrialized country. On the income distribution, there are 5.8 million households in 2007. Of that, 8.6% have an monthly income below RM1,000, 29.4% had between RM1,000 and RM2,000, while 19.8% earned between RM2,001 and RM3,000; 12.9% of the households earned between RM3,001 and RM4,000 and 8.6% between RM4,001 and RM5,000. Finally, around 15.8% of the households have an income of between RM 5,001 and RM 10,000 and 4.9% have an income of RM 10,000 and above.
As one of three countries that control the Strait of Malacca, international trade plays a large role in its economy. At one time, it was the largest producer of tin, rubber and palm oil in the world. Manufacturing has a large influence in the country's economy.
STATISTICS OF MALAYSIAN ECONOMY
GDP $381.1 Billion (2009)GDP GROWTH -2.2% (2009)GDP PER CAPITA $14,800 (2009)GDP BY SECTOR Agriculture (10.1%); Industry (42.3%); Services (47.6%) (2009)INFLATION (CPI) 0.4% (2009)POPULATION BELOW POVERTY LINE
3.5% (2007)
LABOR FORCE BY OCCUPATION Agriculture (13%); Industry (36%); Services (51%) (2007)UNEMPLOYMENT RATE 5% (2009)INDUSTRIES Rubber and palm oil processing and manufacturing, light manufacturing
industry, electronics, tin mining and smelting, logging and processing timber, tourism, petroleum production and refining, logging
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Economic Growth and International Trade
EXPORTS IN VALUE $156.4 Billion (2009)MAJOR EXPORTS Electronic equipment, petroleum and liquefied natural gas, wood and
wood products, palm oil, rubber, textiles, chemicalsMAJOR EXPORT PARTNERS Singapore 13.9%, China 12.2%, United
States 10.9%, Japan 9.8%, Thailand5.4%, Hong Kong 5.2% (2009 est.)IMPORTS IN VALUE $119.5 billion (2009 est.)MAJOR IMPORTS Electronics, machinery, petroleum products, plastics, vehicles, iron and
steel products, chemicalsMAJOR IMPORT PARTNERS China 13.9%, Japan 12.5%, Singapore11.1%, Thailand 6%, Indonesia 5.3
%, South Korea 4.6%, Tawian4.2%, Germany 4.2% (2009 est.)
TIGER ECONOMY
Macro-Economic TrendThis is a chart of trend of gross domestic product of Malaysia at market prices estimated by the International Monetary Fund with figures in millions of Malaysian Ringgit.
Year GDP(in millions)
Exchange(1 USD to MYR)
Inflation Index(2000=100)
Per Capita Income(as % of USA)
1980 54,285 2.17 51 14.78
1985 78,890 2.48 64 11.44
1990 119,082 2.70 70 10.47
1995 222,473 2.50 85 15.69
2000 343,216 3.80 100 11.47
2005 494,544 3.78 109 12.67
For purchasing power parity comparisons, the US Dollar is exchanged at 1.70 Ringgit only. Average wages in 2007 hover around $30–37 per day.
From 1988 to 1997, the economy experienced a period of broad diversification and sustained rapid growth averaging 9% annually.
By 1999, nominal per capita GDP had reached $3,238. New foreign and domestic investment played a significant role in the transformation of Malaysia's economy. Manufacturing grew from 13.9% of GDP in 1970 to 30% in 1999, while agriculture and mining which together had accounted for 42.7% of GDP in 1970, dropped to 9.3% and 7.3%, respectively, in 1999. Manufacturing accounted for 30% of GDP (1999). Major products include electronic components – Malaysia is one of the world's largest exporters of semiconductor devices – electrical goods and appliances.
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Economic Growth and International Trade
Foreign funds were attracted to invest making the local money market and bourse liquid. This created opportunity for local businesses to raise capital on the KLSE, and carry out infrastructure development in areas like telecommunications, highways and power generation to meet bottlenecks caused by rapid industrialization. An intense labor shortage created employment for millions of foreign workers. Subsequent events show that more than 50% were illegal.
The influx of foreign investment led to the KLSE Composite index trading above 1,300 in 1994 and the Ringgit trading above 2.5 in 1997. At various times the KLSE was the most active exchange in the world, with trading volume exceeding even the NYSE. The stock market capitalization of listed companies in Malaysia was valued at $181,236 million in 2005 by the World Bank.
Concerns were raised during the time about the sustainability of the rapid growth and the ballooning current account. The mainstream opinion prevalent at that time was that the deficit was temporary and would reverse once imported equipment started producing for export. In spite of that, measures were taken to moderate growth especially when it threatened to overheat into the double digits. The main target was asset prices, and restrictions were further tightened on foreign ownership of local assets. Exposure of local banks to real estate loans were also capped at 20%.
As was widely expected, the current account deficit did narrow steadily, year to year, from 9% to 5% of GDP.
Malaysia has the largest operational stock of industrial robots in the Muslim world.
EXTERNAL TRADE
Malaysia is an important trading partner for the United States. In 1999, two-way bilateral trade between the U.S. and Malaysia totaled U.S. $30.5 billion, with U.S. exports to Malaysia totaling U.S. $9.1 billion and U.S. imports from Malaysia increasing to U.S. $21.4 billion. Malaysia was the United
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Economic Growth and International Trade
States' 10th-largest trading partner and its 12th-largest export market. During the first half of 2000, U.S. exports totaled U.S. $5 billion, while U.S. imports from Malaysia reached U.S. $11.6 billion.
The Malaysian Government encourages Foreign Direct Investment (FDI). According to Malaysian statistics, in 1999, the U.S. ranked first among all countries in approved FDI in Malaysia's manufacturing sector with approved new manufacturing investments totaling RM5.2 billion (US$1.37 billion). Principal U.S. investment approved by the Malaysian Investment Development Authority (MIDA) was concentrated in the chemicals, electronics, and electrical sectors. The cumulative value of U.S. private investment in Malaysia exceeded $10 billion, 60% of which is in the oil and gas and petrochemical sectors with the rest in manufacturing, especially semiconductors and other electronic products.
FREE TRADE EFFORTSMalaysia is the founding member of the ASEAN Free Trade Area which was established in 1992 to promote trade among ASEAN members. Most tariffs among the first generation member states were scrapped in 2007. ASEAN itself is increasingly playing a large role in free trade negotiation on behalf of its members. ASEAN as a group hopes to establish a free trade agreement with the European Union by 2009.
The Malaysian Government is negotiating free trade deals with Australia, Chile and India, but has suspended negotiation of free trade deal with United States indefinitely after eight rounds of negotiation. Officials have expressed desire for free trade agreements their ASEAN members Singapore and Thailand. The Malaysian Trade Ministry released a statement in Vietnam saying that the FTA "has the potential to increase trade, investment cross flows and economic cooperation between the two countries. The agreement would also serve to make Chile a gateway for Malaysia's exports to the Latin American market."
Malaysia signed a Japan-Malaysia Economic Partnership Agreement with Japan on 13 December 2005. This leads to a Free trade agreement which was in effect from 13 July 2006 and expected to be fully realized in 2016. The agreement itself is an extension of an FTA between ASEAN and Japan, which is called Asean-Japan Comprehensive Economic Partnership.
On 8 November 2007, Malaysian and Pakistan signed a bilateral Free Trade Agreement which will come in force on 1 January 2008. Malaysia will cut tariffs on 140 lines while Pakistan will cut 124 lines. Most tariffs and duty is expected to be eliminated by 2012.
Other 'economic areas' showing an interest in establishing free-trade agreements with Malaysia are the European Union and Hong Kong. However, before any talks can be initiated regarding new FTAs, Joint Economic Co-operation deals need to be concluded. International Trade and Industry
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Economic Growth and International Trade
Minister, Tan Sri Muhyiddin Yassin has expressed the hope that talks will be concluded by the end of 2008.
MAJOR IMPORTS AND EXPORTS
Southeast Asia, particularly Malaysia, has been a trade hub for centuries. Since the beginning of
history, Malacca has served as a fundamental regional commercial center for Chinese, Indian, Arab
and Malay merchants for trade of precious goods. Today, Malaysia shares healthy trade relations
with a number of countries, specifically the US. The country is associated with trade organizations,
such as APEC, ASEAN and WTO. The ASEAN Free Trade Area that was established for trade
promotion among ASEAN members also has Malaysia as its founding member. Malaysia has also
signed Free Trade Agreements with countries including Japan, Pakistan, China and New Zealand.
Malaysia was once the world’s largest producer of tin, rubber and palm oil. Its manufacturing
sector has a crucial role in its economic growth. The export industry was hit hard during the late
2000 economic recession drastically dropping to 78% i.e. FDI to RM4.2 billion in the first two
quarters of 2009. Total exports fell down to $156.4 billion in 2009 from $198.7 billion in 2008. The
imports also reduced from 154.7 billion in 2008 to $119.5 billion 2009.
EXPORT COMMODITIES
Electronic equipment
Petroleum and liquefied natural gas
Wood and wood products
Palm oil
Rubber
Textiles
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Economic Growth and International Trade
Chemicals
EXPORT PARTNERS
IMPORT COMMODITIES
Electronics
Machinery
Petroleum products
Plastics
Vehicles
Iron and steel products
Chemicals
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Economic Growth and International Trade
IMPORT PARTNERS
TRADE RELATIONSHIP WITH U.S.Malaysia Leads as High-Tech Products Exporter of Computers, computer accessories and telecommunications equipment account for 52% of Malaysian exports while semiconductors which generate 47% of sales to America.
Malaysia’s Gross Domestic Product (GDP) was an estimated US$222.2 billion in 2008, making Malaysia the world’s 39th richest country.
With a population of 25.7 million Malaysians who enjoyed an average GDP of $15,200 per person last year, Malaysia placed 74th among other nations in terms of GDP per capita.
As the world’s 21st biggest exporting nation, Malaysia shipped $198.9 billion worth of exports in 2008. Malaysian exports include electronic equipment, petroleum, liquefied natural gas, wood, rubber and textiles. Based on 2008 statistics, Malaysia’s largest export clients were Singapore (15.6%), the United States (12.9%), China (12.5%), Japan (9.6%) and Thailand (4.1%).
According to the CIA World Factbook, Malaysia imported $154.7 billion worth of foreign goods last year. Major commodities imported into Malaysia include machinery, petroleum products, plastics, vehicles, iron and steel products and chemicals. Leading suppliers to Malaysia were Singapore (23%), China (12.7%), Japan (9.8%), the United States (7.8%), Thailand (5.7%) and South Korea (4.3%).
In total, Malaysia’s international trade amounted to $353.6 billion or 159.1% in relation to its overall GDP. This compares with roughly 25% for the U.S. and 60% for Canada.
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TRADE WITH THE U.S.
Last year, Malaysian exports to America fell 5.8% to $30.7 billion. Over that same period, Malaysia bought $12.9 billion worth of U.S. imports – an increase of 10.9%.
After subtracting imports from exports, one can quickly calculate Malaysia’s trade surplus with the U.S. to equal a healthy $17.8 billion in 2008.
The lists below present the top 10 exports and imports that American and Malaysian enterprises exchanged in 2008. The fastest-growing trade product categories are also listed.
TOP EXPORTS TO AMERICA
Malaysia’s top 3 exports were hi-tech products that represented 51.8% of Malaysian exports to the U.S. last year. In total, the following 10 Malaysian exports generated 77.1% of the total value of shipments from Malaysia to America in 2008.
1. Computers … US$6.7 billion, down 17.2% from 2007 (21.9% of US imports from Malaysia)2. Computer accessories and parts … $4.8 billion, down 14.4% (15.6%)
3. Telecommunications equipment … $4.4 billion, down 1.2% (14.3%)
4. Semiconductors … $2.9 billion, up 2% (9.6%)
5. Food oils and oilseeds … $1.2 billion, up 76.7% (3.9%)
6. Other household goods including clocks … $964.8 million, down 21.8% (3.1%)
7. Other scientific, medical and hospital equipment … $899.5 million, up 19.4% (2.9%)
8. Household items including baskets and furniture … $710.5 million, down 8.2% (2.3%)
9. Stereo equipment including radios … $566.1 million, down 6.3% (1.8%)
10. Video equipment (DVD players, VCRs, TV receivers) … $516.6 million, up 12.3% (1.7%).
FASTEST-GROWING MALAYSIAN EXPORTS TO THE U.S.
Malaysian exported tin had the most dramatic increase in sales to the U.S., while 7 other product categories showed impressive triple-digit gains.
1. Tin … US$34.9 million, up 1,881% from 20072. Oilfield and drilling equipment … $14.1 million, up 990.4%
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3. Feedstuff and food grains … $21.2 million, up 183.3%
4. Crude oil… $63.2 million, up 169.8%
5. Synthetics (cork, gums, resins, rubber, wood)… $6.8 million, up 162.4%
6. Vegetables and preparations … $6.4 million, up 153.4%
7. Paper and paper products … $9.7 million, up 137%
8. Miscellaneous non-ferrous metals … $12.6 million, up 121.6%
9. Agricultural machinery and equipment … $2.7 million, up 91.4%
10. Fertilizers and pesticides … $43.2 million, up 87.1%.
TOP IMPORTS FROM AMERICA
Semiconductors, steelmaking and plastic materials illustrate the fact that many of America’s exports to Malaysia are source inputs for Malaysian manufacturers. The following top 10 exports from America to Malaysia accounted for 74.6% of Malaysia overall imports from the U.S.
1. Semiconductors … US$6.1 billion, up 21.7% from 2007 (47.3% of US exports to Malaysia)2. Computer accessories … $586.7 million, up 7.4% (4.5%)
3. Steelmaking materials … $525.6 million, up 45.4% (4.1%)
4. Other industrial machines … $421.8 million, down 20.3% (3.3%)
5. Electric apparatus … $421 million, down 8.5% (3.3%)
6. Telecommunications equipment… $416.7 million, down 13.2% (3.2%)
7. Measuring, testing and control instruments … $369.8 million, up 29.9% (2.9%)
8. Civilian aircraft… $346.8 million, down 31.6% (2.7%)
9. Generators and accessories … $245.5 million, up 98.6% (1.9%)
10. Plastic materials … $163.5 million, up 5.7% (1.3%).
FASTEST-GROWING MALAYSIAN IMPORTS FROM THE U.S.
The top 10 list of Malaysian growth imports were for relatively small dollar amounts. Three of these import categories were up by triple-digits while the remaining 7 product categories had double-digit gains.
1. Artillery, guns, missiles and tanks … US$28.6 million, up 653.1% from 200745
Economic Growth and International Trade
2. Food oils and oilseeds … $8.4 million, up 553.9%
3. Other iron and steel products … $27.3 million, up 111.7%
4. Generators and accessories … $245.5 million, up 98.6%
5. Chemical fertilizers… $22 million, up 97.3%
6. Marine engines and parts … $34.1 million, up 84.7%
7. Trucks, buses and special purpose vehicles … $2.3 million, up 79.3%
8. Textile and sewing machines … $6.3 million, up 69.2%
9. Unmanufactured agriculture industry products … $27.1 million, up 67.4%
10. Unmanufactured tobacco … $20.9 million, up 66%.
COMPARATIVE TRADE ADVANTAGES
During 2008, Malaysia exported $11.5 billion worth of computers and accessories to the U.S. while importing $715 million of those same product categories from America.
These Malaysian-American trade statistics show that Malaysia has a comparative advantage over the U.S. in the trade of computers and accessories between the 2 nations.
On the other hand, America exported $6.1 billion worth of cornputers to Malaysia in 2008 compared with $2.9 billion in Malaysian semiconductors imported into the U.S.
That the U.S. shipped to Malaysia over twice the value of imported Malaysian semiconductors clearly shows that America has a comparative advantage in trading semiconductors with Malaysia.
CHALLENGES
According to Deputy Prime Minister of Malaysia, the country should diversify trade pattern and explore China's sectors.
With reference to an excerpt from the article published in KUALA LUMPUR, May 22 (Bernama) –
Malaysia should diversify its trade pattern and explore emerging sectors in China which have high potential for future growth, according to Deputy Prime Minister Tan Sri Muhyiddin Yassin.
"Currently, most of our bilateral trade comprises electronics and electrical products, palm oil and chemicals. Clearly, we can do much more to diversify the pattern," he said.
Muhyiddin said with the move towards the Asean-China Free Trade Area, Malaysia could and should significantly diversify and broaden opportunities for trade and investment with China.
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CONCLUSION
After a thorough analysis of the various impacts of free trade and discovering examples of each of
the economies under review and their relative success, we have come to the conclusion that “Free
Trade” is one of the best available solutions to get ourselves out of the chaotic mess that we find
ourselves in and there is a lot we can learn from our Asian counterparts on how they have used this
weapon up their arsenal to establish themselves on the world stage.
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Hertel, T. W. (1997), Global Trade Analysis: Modeling and Applications, Cambridge University Press, Cambridge
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Ianchovichina, E., J. Binkley and T. W. Hertel (2000), “Procompetitive Effects of Foreign Competition on Domestic Markups”, Review of International Economics, 8(1)
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Itakura, K., T. Hertel and J. Reimer (2002), “Free Trade Agreement in East Asia: Implications for Trade, Prodcution and Welfare”, a paper presented at the Fifth Annual Conference on Global Economic Analysis, June 5-7, 2002, Taipei
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KIEP (2000), ”Economic Effects of and Policy Directions for a Korea-Japan FTA”, Korean Institute for International Economic Policy
McDonald, S. and T. Walmsley (2003), “Preferential Trade Agreements and the Optimal Liberalization of Agricultural Trade”, a paper presented at the Sixth Annual Conference on Global Economic Analysis, June 12-14, 2003, The Hague
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CGE Model”, JCER DISCUSSION PAPER No. 74, Japan center for Economic Research (in Japanese) www.wikipedia.com/economyofmalaysia http://www.economywatch.com/world_economy/malaysia/export-import.html http://import-export.suite101.com/article.cfm/malaysias_top_imports_exports_2008 Latest statistics from the US Census Bureau- Foreign Trade Statistics and CIA World Factbook as of
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http://www.bernama.com/bernama/v5/newsbusiness.php?id=500392
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