Search

Begin New Search Topic International Cooperation Political Geography Asia Publishing Institution Economic Research Institute for ASEAN and East Asia (ERIA)

1. Technical Barriers to Trade and the Performance of Indian Exporters

Author:
Pavel Chakraborthy and Rahul Singh
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We study the effects of technical barriers to trade (TBTs) imposed by destination markets on prices, marginal costs, and markups of Indian manufacturing exporters. Using detailed firm-product-level data on prices and production from PROWESS, we first identify the underlying component of prices (i.e. marginal costs and markups), and use those as our outcomes of interest in the second stage. We find that (i) introduction of TBTs by importing countries increases marginal costs by 5% and prices by 4%, (ii) there is considerable heterogeneity based on exporters’ initial productivity, (iii) productive exporters (those belonging to the lower deciles) experienced an increase in marginal costs and decrease in markups compared to low productivity exporters, and (iv) overall effects are driven by private firms (both domestic and foreign) belonging to intermediate input industries.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Exports
Political Geography:
India and Asia

2. Effective Rates of Protection in a World With Non-Tariff Measures and Supply Chains: Evidence from ASEAN

Author:
Ben Shepherd
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The concept of effective rate of protection expresses protection on a sector’s final output relative to protection affecting its inputs. As such, it is well adapted to analysing the effects of trade policy from a supply chain standpoint. This paper makes two contributions to the literature on effective rates of protection. First, it draws on the literature on trade in value added to highlight an alternative to the traditional measure that better accounts for supply chain trade by considering both direct and indirect input use. Second, it includes data on ad valorem equivalents of non-tariff measures, which are increasingly important as trade policy instruments. In an analysis covering 17 aggregate goods sectors, I find that average tariff only effective rates of protection in ASEAN averaged 6.9% and ranged from zero to 23.4% in 2018. By contrast, effective rates including non-tariff measures averaged 14.0% and ranged from –6.2% to 44.0%. While patterns of escalation and even effective taxation differ substantially across sectors, most countries practice a tariff and NTM trade policy that is broadly neutral between input and output sectors, but which causes low to moderate isolation from world markets. Given the complexity of tariffs and NTMs from a supply chain perspective, there would likely be reductions in economic waste accompanying substantial simplification.
Topic:
Economics, Globalization, International Cooperation, International Trade and Finance, Protectionism, Non-Tariff Measures, and Supply Chains
Political Geography:
Asia and Southeast Asia

3. Reconciling Tax and Trade Rules in the Digitalised Economy: Challenges for ASEAN and East Asia

Author:
Jane Kelsey
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
As the digital economy expands in scale, scope, and form it poses major challenges for public revenue and tax policy and administration in Asia and other parts of the global South. When attempts led by developed countries at the OECD-led Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to agree on new norms for taxing digital giants like Facebook, Google, and Amazon stalled, individual countries, including a number of developing countries in Asia, began developing their own responses, notably the adoption of digital services taxes. High-level compromises have recently been announced at the OECD, but the details are yet to come and are not expected to address the needs of developing countries to effectively tax the activities of digital giants operating from offshore. As countries seek effective and workable means to tax the digitalised economy, existing and proposed international rules on digital trade in free trade agreements, and plurilateral moves to develop electronic commerce rules in the World Trade Organization, may fetter their ability to do so. To date, very little attention has been paid in trade negotiations to the consequences of these developments for countries’ tax regimes. Nor have the adequacy, effectiveness, and workability of the tax exceptions in trade and investment agreements been properly re-assessed. Many governments are only becoming aware that trade rules may constrains their ability to regulate the (poorly understood and fast moving) digital domain after they have signed up to them. A series of investigations by the US government under Section 301 of the US Trade Act 1974 into digital services taxes, including those adopted by India and proposed by Indonesia, provides a real-world basis on which to assess how binding and enforceable digital trade rules might be used to challenge digital tax measures at the unilateral, bilateral, and multilateral levels. In highlighting these risks, the paper aims to provide a framework for the tax and trade divisions of governments in ASEAN and East Asia to reflect together on the potential for proposed digital trade rules to impact negatively on their public revenue.
Topic:
International Cooperation, International Trade and Finance, Digital Economy, Tax Systems, Commerce, and Digitalization
Political Geography:
Asia and Southeast Asia

4. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia

Author:
Yan Lili Ing and Junianto James Losarili
Publication Date:
08-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
Topic:
Economics, International Cooperation, International Trade and Finance, European Union, and Investment
Political Geography:
China, Europe, Indonesia, and Asia

5. Regulatory Distance, Margins of Trade, and Regional Integration: The Case of the ASEAN+5

Author:
Chandran Govindaraju, Neil Foster-McGregor, and Evelyn Shyamala Devadason
Publication Date:
09-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper measures regulatory distance in non-tariff measures (NTMs) to examine the regulatory distance patterns and how the margins of trade respond to regulatory distance for the ASEAN+5 economies (the 10 Association of Southeast Asian Nations Member States plus Australia, China, India, Japan and New Zealand). It decomposes the margins of trade and regulatory distance by sector (agriculture and manufacturing) and NTM type (technical, non-technical, sanitary and phytosanitary (SPS), technical barriers to trade (TBTs), and pre-shipment inspections and other measures) for the 15 countries. At the country level, the results indicate a varying regulatory distance amongst the ASEAN+5 countries. Regulatory implementation also varies by sector and by the type of measure. Within sectors, SPS regulatory distance is higher in the agriculture sector, while for manufacturing, the regulatory distance in TBTs is higher. Notably, few countries recorded a higher regulatory distance for non-technical measures and pre-shipment inspections. Interestingly, for the ASEAN region, there seems to be no evidence supporting a reduction in regulatory distance from 2015 to 2018, despite efforts to harmonise NTMs since 2015. The results indicate that regulatory distance largely has a trade-reducing effect along the trade margins within ASEAN+5 bilateral trade. Technical measures have a greater trade-reducing effect than other measures along extensive and intensive trade margins – specifically SPS in the agriculture sector and TBTs in the manufacturing sector. Notably, there is also evidence of non-technical measures and pre-shipments and other formalities impacting trade along extensive margins, despite efforts to establish trade facilitation. The paper also describes some policy implications.
Topic:
Economics, International Cooperation, International Trade and Finance, Regulation, and Regional Integration
Political Geography:
Asia and Southeast Asia

6. Spillover Effects of Social and Economic Interactions on COVID-19 Pandemic Vulnerability Across Indonesia’s Regions

Author:
Ernawati Pasaribu, Puguh B. Irawan, Tiodora H. Siagian, Ika Yuni Wulansari, and Robert Kurniawan
Publication Date:
10-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This research study focuses on measuring the possible spillover effects of socio-economic interactions on COVID-19 pandemic vulnerability across Indonesia’s regions by utilising a spatial simultaneous model. The COVID-19 pandemic vulnerability level here is used to indicate the extent to which a region is susceptible to the spreading COVID-19 pandemic, as determined by not only the region’s COVID-19 related epidemiological factors but also by its relevant socio-demographic and economic aspects, housing, environmental health, and availability of health facilities. High COVID-19 pandemic vulnerability levels were mostly found in districts in Java Island and southern Sumatera, suggesting high population density and mobility in both regions. It was revealed that 31 districts have low COVID-19 risk levels (from epidemiological indicators-related measurements), but they have high COVID-19 vulnerability levels (from epidemiological and socioeconomic indicators-based measurements). Labour productivity was found to have a reciprocal relationship with COVID-19 vulnerability, proving that the COVID-19 pandemic has a significant impact on labour productivity and vice versa. On the other hand, regional independence affects COVID-19 vulnerability, but this does not apply the other way around. Moreover, this study has also proven that COVID-19 pandemic vulnerability levels have socio-economic spillover effects on neighbouring areas in Indonesia.
Topic:
Economics, International Cooperation, Pandemic, COVID-19, Socioeconomics, and Economic Integration
Political Geography:
Indonesia and Asia

7. China's Ties with Southeast Asia : From Green Shoots to Sustained Recovery

Author:
Kensuke Tanaka
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
Topic:
Development, Economics, International Cooperation, International Trade and Finance, and Economic Recovery
Political Geography:
China, Asia, and Southeast Asia

8. The Economic Impact of Globalisation in Indonesia

Author:
Kiki Verico and Mari Pangestu
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper analyses the economic impact of globalisation in Indonesia from the end of the 1960s to date. The analysis found that globalisation generated a positive impact on Indonesia’s economic growth through the trade and investment channel; reduced wage inequality and child labour participation; and increased labour absorption, including women's participation in the labour market. Through the trade channel, globalisation also contributed to Indonesia’s productivity and structural economic transformation, benefited small and medium-sized enterprises (SMEs), contributed to poverty alleviation and reduced inequality, and increased trade in services such as tourism. Through the investment channel, there is evidence of the spillover effect of technology transfer, technology progress, improvement of the role of SMEs, and contribution to poverty alleviation. The waves of open and more restrictive trade and investment policies, which Indonesia has gone through in the last few decades, reflect the political economy reality – that is, the impact of globalisation is dynamic and only felt in the medium term, whereas the cost and potential negative impact is often felt more immediately throughout trade creation. The trade creation increases imports from countries with which free trade agreements have been negotiated, decreasing the domestic producer surplus. Since globalisation will create net benefits in the long run, Indonesia should continue its process of globalisation and integration with the world economy to ensure the net benefits and to move forward in its structural transformation, while managing the costs of globalisation and its transition process.
Topic:
Globalization, International Cooperation, International Trade and Finance, and Economic Growth
Political Geography:
Indonesia, Asia, and Indo-Pacific

9. The Contents of Power: Narrative and Soft Power in the Olympic Games Opening Ceremonies

Author:
David Leheny
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines debates about soft power and popular culture, with particular attention to the framing and reception of the opening ceremonies at the Olympics. It examines how national narratives, particularly in the oft-noted Beijing 2008 Games and the London 2012 Games, have been analysed, turning then to a discussion of clues regarding the likely framing of the 2020 opening ceremony in Tokyo.
Topic:
International Cooperation, Sports, Olympics, and popular culture
Political Geography:
Japan, China, United Kingdom, Europe, and Asia

10. Value Added Exports and the Local Labour Market: Evidence from Vietnamese Manufacturing Firms

Author:
Duc Anh Dang
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The formation of global value chains (GVCs) has reshaped production processes across countries. This paper investigates the relationship between GVCs and firms’ employment by using panel data on Vietnamese small manufacturing firms for 2005–2011. The results suggest that increased foreign value added in exports results in higher wages, increased productivity, and a greater share of production workers in domestic small and medium-sized enterprises. In addition, it brings about a lower share of professionals and makes smaller firms retrain their existing workers. At the same time, domestic value added in the export of intermediate products has negative impacts on employment and increases wages, particularly in medium-sized firms. All of these may come from the increased competition for labour from larger firms.
Topic:
International Cooperation, Labor Issues, Trade, and Global Value Chains
Political Geography:
Asia and Vietnam

11. In the Closet: Japanese Creative Industries and their Reluctance to Forge Global and Transnational Linkages in ASEAN and East Asia

Author:
Shinji Oyama
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper addresses rarely asked questions: is Cool Japan a creative industries policy and, if so, what kind of creative industries policy is it? It addresses these questions by examining Cool Japan’s differences from the UK derived and globally very influential creative industries model. The paper will try to make sense of these differences by looking at how the Japanese creative industries comprise businesses of different sizes with a varied history and prestige, how those companies have complex and contrasting relationships with various state organisations, and how the forces of globalisation and its free-market and neo-liberal economic ideologies affect companies in various sectors differently. This will challenge the dominant narrative of Japanese Creative Industries and Cool Japan in which, it is generally believed, the former embraces globalisation and digitalisation, and the latter is responsible for broadening the appeal of Japanese popular culture abroad. This paper reveals the complexity and diversity of the creative industries from socio-cultural and politico-economic perspectives often overlooked in the Cool Japan discourse.
Topic:
Globalization, International Cooperation, transnationalism, and Industry
Political Geography:
Asia

12. Dawei Revisited: Reaffirmation of the importance of the project in the era of reforms in Myanmar

Author:
Ikumo Isono and Satoru Kumagai
Publication Date:
05-2013
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Myanmar has entered a new era of all-round reforms. Donors and foreign investors are mainly interested in Yangon, while there has been a delay in the Dawei deep sea project, the Dawei Special Economic Zone project and the road connection to Thailand. The change in circumstances poses a question about whether the Dawei project is still needed in the era of a reforming Myanmar. Our geographical simulation analysis clearly shows that the Dawei project has significant additional benefit for the whole Mekong region and points out the importance of international cooperation.
Topic:
Development, Economics, International Cooperation, Reform, and Investment
Political Geography:
Asia, Burma, and Myanmar

13. ASEAN in the Global Economy- An Enhanced Economic and Political Role

Author:
Anita Prakash and Ikumo Isono
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Established in 1967, ASEAN has travelled a long way from a group of five nations to a thriving and leading group of ten countries. Based on the progress in the implementation of the blueprints for building the ASEAN community by 2015, there is an enhanced role for the ASEAN in dealing with regional and global challenges. It is emerging as a services hub in the region and is the chosen destination for investments. At the end of Indonesia's chairmanship of ASEAN, which had set the theme 'ASEAN in a global community of nations', it is imperative to take a stock of the readiness of the region if it is well on its way to step into a truly global role in the near future, especially by its goal of becoming one community by 2015. With its strategic location, abundant natural resources, quality human resources and growing economies, ASEAN has engaged economically, by way of trade and investments, with all the large economies of the world. It has also gained strategic weight and drawn the attention of global players, both economically and politically. Its global engagement is best exemplified by the fact that 55 countries across the globe have appointed their envoys to the regional grouping and this number is growing. Sitting in the midst of giant economies like Japan, China and India, and with active economic relations with USA and the EU, ASEAN is now seeking its due share in the global economy and politics. This Policy Brief looks into the current global profile of ASEAN and brings out policy recommendations that would help ASEAN in finding its appropriate role in the global politics and economy.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, Hegemony, and Economy
Political Geography:
Asia and Southeast Asia

14. Toward a Consolidated Preferential Tariff Structure in East Asia: Going beyond ASEAN+1 FTAs

Author:
Sio Yue Chia
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
ASEAN countries are discussing a possible template for trade in goods chapter of so-called ASEAN++ FTA (also known as RCEP). Analyses of tariff structures under the current ASEAN+1 FTAs give insights on possible approaches as well as challenges in this discussion. To meet 90% or 95% tariff elimination thresholds, both ASEAN countries and their FTA partners should make further efforts. When a "common concession" approach, which we advocate in this paper, is applied, the challenge becomes even larger as member countries should focus their policy discretion on a more limited number of sensitive products. These challenges, on the other hand, mean room for additional gains for potential users of the new agreement despite the existence of ASEAN+1 FTAs.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Tariffs
Political Geography:
Asia and Southeast Asia

15. Trade Facilitation: The Way Forward for ASEAN and Its FTA Partners

Author:
Marie Isabelle Pellan Marn-Heong
Publication Date:
07-2012
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
ASEAN is working towards establishing a Regional Comprehensive Economic Partnership with its FTA partners. All five existing ASEAN+1 FTAs contain provisions on trade facilitation. Although varying in their scope, specificity and depth of commitments, they tend to cover several core areas and affirm the application of international agreements, standards and instruments. A review of trade facilitation performance shows that there are great disparities among ASEAN countries and their FTA partners. Reform efforts in the area of trade facilitation could be tracked regularly through a set of specially-compiled indicators. The following policy recommendations could inform discussions on trade facilitation coverage in the context of a wider agreement between ASEAN and its FTA partners: (i) define a consistent set of trade facilitation principles; (ii) adopt specific trade facilitation measures; (iii) monitor performance in core trade facilitation areas and set targets; (iv) share best practices and implement capacity-building measures in priority areas; and (v) keep abreast of developments in the multilateral process.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, and Economic Cooperation
Political Geography:
Asia and Southeast Asia

16. The Proposed Cilamaya New International Port is a Key for Indonesian Economic Development: Geographical Simulation Analysis

Author:
Ikumo Isono and Satoru Kumagai
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Many foreign investors are now interested in Indonesia, especially in the automotive sector, because ofits growing attraction as a market and production site. At the same time, there is concern that poor infrastructureand delays in infrastructure development are impeding the economic growth of the country. Our Geographical Simulation Model assesses the economic impacts of two key infrastructure projects, i.e., Cilamaya New International Port and an access road between Cikarang and Tanjung Priok. The model shows that delays in construction will hamper the economic growth of Indonesia.
Topic:
Diplomacy, International Cooperation, Infrastructure, and Economic Development
Political Geography:
Indonesia and Asia

17. Deepening East Asian Economic Integration in Services

Author:
Phillippa Dee
Publication Date:
10-2010
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In services markets, there may be legitimate reasons to regulate. Integration efforts should target regulatory restrictions that explicitly limit competition, and those that are intended to meet legitimate objectives, but are clearly more burdensome than need to be. In health and maritime, ASEAN is already relatively liberal by international standards, although there is still scope to promote cross-border trade and ease costly cabotage restrictions. In telecommunications, the residual foreign equity limits are hard to understand, given that past reforms and current technologies have ensured that most markets are already relatively competitive. In finance, there is substantially more to do, despite progress made during the Asian financial crisis. And in air transport, despite commitments to open skies, there is a need to further align the content of bilateral air services agreements with regional integration objectives.
Topic:
International Cooperation, International Trade and Finance, Markets, Bilateral Relations, and Services
Political Geography:
Asia and Southeast Asia

18. Why Is the East Asia Industrial Corridor Needed?

Author:
Fukunari Kimura and Izuru Kobayashi
Publication Date:
01-2009
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The East Asia Industrial Corridor Project, in particular the Southern Corridor and its extension, can be a path-breaking effort for attaining both deepening economic integration and narrowing development gaps. New economic thoughts claim the necessity of comprehensive approach in which various policy modes and a number of stake holders are effectively coordinated.
Topic:
Development, International Cooperation, International Trade and Finance, and Economic Integration
Political Geography:
East Asia and Asia

19. A lot of Reasons Why We Should Invest More in East Asia

Author:
Fukunari Kimura and Soji Samikawa
Publication Date:
04-2009
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Although the impact of financial crisis originated from North America and Europe has come to East Asia through both the financial link and the real economy link, the East Asian countries have so far largely responded to it calmly and cautiously. There are now a lot of reasons why we should invest more in East Asia not only for providing short-run stimulus but also for strengthening long-run growth basis. The introduction of market forces in infrastructure development in the form of public-private partnership (PPP) is delayed in East Asia and is thus to be promoted. However, the importance of public initiatives including official development assistance (ODA) and other official flows (OOF) must also be emphasized in recession.
Topic:
Development, International Cooperation, Finance, Investment, and Economic Cooperation
Political Geography:
East Asia and Asia

20. Trade Facilitation in the ASEAN Economic Community

Author:
Christopher Findlay
Publication Date:
11-2009
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Trade facilitation refers to the reduction of costs in the trading system. Significant cost reductions are possible, but policy reform and international cooperation are required to capture those gains. ASEAN has a key role to play in that work. Suggestions for the ASEAN scorecard are to reinforce or add commitments to, and then monitor the implementation of (a) National Single Windows as a prerequisite to the ASEAN Single Window, (b) a web-based databank of trade regulations that is regularly updated, (c) streamlined and harmonized procedures, starting with the Customs declaration (or 'SAD') form, and (d) mutually recognized technical standards. In terms of performance measures it is recommended to (1) have ASEAN customs authorities report regularly and in a comparable manner on clearance time through customs, (2) maintain and report updates of a logistics restrictiveness index for all countries in each year which has been developed in this project, and (3) recalculate adjusted cif/fob ratios as measures of trade costs, using the methodology developed in this project.
Topic:
Economics, International Cooperation, International Trade and Finance, World Trade Organization, World Bank, and Tariffs
Political Geography:
Asia and Southeast Asia