Regional Cooperation and Integration in a Changing World
This monograph-prepared for the 2013 Asian Development Bank Annual Meeting-aims to stimulate debate and further research on the role regional integration can play in sustaining growth, reducing poverty, and promoting welfare and future prosperity for Asia and the Pacific.
With Asia's continuing rise and growing impact on the global economy, regional cooperation and integration is expanding, bringing with it both benefits and costs. To sustain region-wide economic growth, an integrated market for the free flow of trade and investment across the region is necessary. Some degree of cooperation, if not coordination, in macroeconomic policy should also be considered.
Intraregional trade in Asia, as well as South-South trade, has grown substantially. But the trade landscape is becoming increasingly complicated with the proliferation of free trade agreements (FTAs). As of January 2013, the economies of Asia were party to 109 ratified FTAs. This has raised concerns over distortions associated with the so-called "noodle bowl" effect. As with trade, financial integration in Asia has also been expanding, though less rapidly and from a low base. Although this has accrued benefits in terms of consumption and investment risk sharing, magnitudes remain small. The majority of Asia's savings continues to be intermediated outside the region.
This monograph aims to stimulate debate and further research on the role regional integration can play in sustaining growth, reducing poverty, and promoting welfare and future prosperity for Asia and the Pacific.
- Regional Integration: Costs and Benefits
- Trade Integration and Policy Challenges