Supporting the Growth and Spread of International Production Networks in Asia: How Can Trade Policy Help?

Publication | May 2013

Can free trade agreements support further growth or spread of production networks in Asia?

Empirical studies have produced mixed results, since causality can run either way. This paper employs a qualitative approach that examines the characteristics of both product fragmentation trade and free trade agreements to ascertain possible linkage. It finds the relationship to be tenuous. Therefore, national liberalization actions that deal with non-tariff barriers and incumbency issues would be the best way to support the growth and spread of production networks.

Contents 

  • Abstract
  • Introduction
  • The Proliferation of FTAs in Asia
  • The Growth in Product Fragmentation Trade
  • Preferential Tariff Reductions and Product Fragmentation Trade
  • Trade Facilitation
  • Conclusion
  • References