This paper evaluates whether the proposed FTAAP is a desirable policy option for APEC member economies and the world economy. More specifically, this paper quantitatively investigates whether the FTAAP satisfies conditions for a trade bloc to generate positive and sufficient net trade creation...

Regime-wide rules of origin (ROO), such as diagonal cumulation, de minimis and self-certification requirement, can be applied to reduce additional administrative and compliance costs for verifying restrictive ROO. However, empirical evidence related to the trade effect of various regime-wide...

The spaghetti bowl phenomenon expected from the proliferating East Asian regional trade agreements (RTAs) is worrisome. In particular, the complicated web of hub-and-spoke type of overlapping free trade agreements (FTAs) can result in high costs for verifying rules of origin (RoO). As an...

The spread of regional trade agreements (RTAs) is strongly motivated by the desire for more foreign direct investment (FDI) flows. The net benefits from freer capital flows are expected to trigger a domino effect of new regionalism. However, this is still an empirical question to be tested,...

As the impact of trade in services on the current global financial crisis appears to overtake that of trade in goods, we propose to examine liberalization of trade in services through regional trade agreements (RTAs). The regional liberalization of trade in services is expected to generate...

We estimate the investment creation and diversion effects of RTAs by using an extended gravity equation focusing on domestic reform as a commitment device for RTA membership. As a case study, we estimate the impact of proposed East Asian RTAs on inward FDI. We find that: (i) reform creating RTA...

This paper investigates the link between patterns of trade and modes of foreign direct investment (FDI) by utilizing exports, imports, and inward FDI data for China over the period 1998 to 2007. We construct a modified gravity equation to find the main modes of inward FDI into China with...

The role of the People’s Republic of China (PRC) in East Asia’s recovery from the recent global financial and economic crisis highlighted the PRC’s growing role as an engine of growth for the region. From the viewpoint of the PRC, there are many potential gains from entering into free...