Is Trade in Asia Really Integrating?
Is intraregional trade in Asia really integrating? There are two ways to assess the level of trade integration: de facto integration and de jure integration.
When trade interdependence between countries is low, they tend to sign a shallow goods-centered agreement to boost trade between them. In contrast, when a high level of trade interdependence is already achieved and the economic interdependence structure between them is complex, a deep agreement that formalizes economic relations is required to avoid ad hoc political bargaining. This difference is the key to understanding the rationale of the noodle bowl of free trade agreements in Asia.
- Recent Development of Trade Interdependence in Asia
- Relation between Trade Interdependence and Free Trade Agreements
- Policy Implications