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  • Author: Kyong Hyun Koo
  • Publication Date: 03-2021
  • Content Type: Policy Brief
  • Institution: Korea Institute for International Economic Policy (KIEP)
  • Abstract: FTAs have been known to have large positive effects on trade creation between member countries. However, it is relatively unexplored how much small/medium-sized enterprises (SMEs) accounted for in the trade creation due to FTAs compared to large-sized enterprises (LEs). We find that Korean FTA policies have significantly increased SMEs’ direct exports to FTA partner countries between 2005 and 2017, although the effects were as much as a half of those for LEs, which indicates a considerable LEs’ premium in the direct export effects of FTAs. We further find that the FTAs also significantly increased the indirect exports of Korean firms, i.e., the domestic input supplies through in-dustrial input-output linkage, and that SMEs have benefited more from the indirect export effects of FTAs than LEs. Considering the direct and indirect export effects together, the LEs’ premium in the total export effects of FTA is found to become smaller.
  • Topic: Treaties and Agreements, Economy, Free Trade, Exports, Trade, Industry
  • Political Geography: Asia, Korea
  • Author: Peter A. Petri, Michael G. Plummer
  • Publication Date: 06-2020
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: he deepening US-China trade war and nationalist reactions to the COVID-19 pandemic are reshaping global economic relationships. Alongside these developments, two new megaregional trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), will refocus East Asia’s economic ties in the region itself. The new accords are moving forward without the United States and India, once seen as critical partners in the CPTPP and RCEP, respectively. Using a computable general equilibrium model, we show that the agreements will raise global national incomes in 2030 by an annual $147 billion and $186 billion, respectively. They will yield especially large benefits for China, Japan, and South Korea and losses for the United States and India. These effects are simulated both in a business-as-before-Trump environment and in the context of a sustained US-China trade war. The effects were simulated before the COVID-19 shock but seem increasingly likely in the wake of the pandemic. Compared with business as before, the trade war generates large global losses rising to $301 billion annually by 2030. The new agreements offset the effects of the trade war globally, but not for the United States and China. The trade war makes RCEP especially valuable because it strengthens East Asian interdependence, raising trade among members by $428 billion and reducing trade among nonmembers by $48 billion. These shifts bring regional ties closer to institutional arrangements proposed in the 1990s and incentivize greater cooperation among China, Japan, and South Korea.
  • Topic: Treaties and Agreements, Trade Wars, Trans-Pacific Partnership, Free Trade, COVID-19, Protectionism
  • Political Geography: China, Asia, North America, United States of America
  • Author: Israel Nyaburi Nyadera, Billy Agwanda
  • Publication Date: 01-2020
  • Content Type: Journal Article
  • Journal: The Rest: Journal of Politics and Development
  • Institution: Centre for Strategic Research and Analysis (CESRAN)
  • Abstract: Turkey’s immigration policies have experienced several changes over the last century. The 2016 agreement between Turkey and the European Union has not only had a significant impact on how Turkey and the European Union deal with asylum seekers, but also revived the debate on the EU’s externalisation of immigration issues. This study aims to examine the impact of the agreement on Turkey’s immigration policymaking process. It identifies that while the European Union may seek to externalise immigration by entering into agreements with third-party states, Turkey’s immigration policies are largely influenced by a complex balance of domestic, regional, and political interest.
  • Topic: Migration, Regional Cooperation, Treaties and Agreements, Immigration, European Union
  • Political Geography: Europe, Turkey, Asia
  • Author: Joseph de Weck
  • Publication Date: 05-2020
  • Content Type: Commentary and Analysis
  • Institution: Foreign Policy Research Institute
  • Abstract: Do you want to know how Beijing would like Europe to act? Take a look at Switzerland. Switzerland and China have been close for decades. It was the first Western nation to establish diplomatic relations with the People’s Republic of China (PRC) in January 1950. Bern wanted to protect investments in the new People’s Republic from nationalization and hoped Swiss industry could lend a hand in rebuilding China’s infrastructure after the civil war. Being friendly to China paid off, but only 30 years later, once reformer Deng Xiaoping took the reins of the Chinese Communist Party (CCP). In 1980, Swiss elevator producer Schindler was the first foreign company to do a joint venture in China. Today, Switzerland is the only continental European country to have a free trade agreement (FTA) with China.
  • Topic: International Relations, Foreign Policy, International Trade and Finance, Treaties and Agreements, Bilateral Relations
  • Political Geography: China, Europe, Asia, Switzerland, Sweden
  • Author: Monika Chansoria
  • Publication Date: 03-2020
  • Content Type: Policy Brief
  • Institution: Japan Institute Of International Affairs (JIIA)
  • Abstract: In the last quarter of the 18th century, Warren Hastings, the first de facto Governor General of India from 1774 to 1785 initiated and set up the English East India Company’s relations with Tibet. The backdrop to this was created when the ruler (sde-srid or srid-skyon) of Bhutan overran Sikkim some years prior. In 1771, the Bhutanese descended on the plains and invaded Cooch-Behar, taking in the Raja (King) as a prisoner. The royal family called on Warren Hastings for assistance, who, in turn, dispatched a battalion of sepoys. The Bhutanese were driven away from Cooch-Behar and chased into the Duars around winter 1772-1773.1 In the given circumstances, the Bhutanese government appealed the Tashi Lama (who was the acting Regent of Tibet during the infancy of the Dalai Lama) to intervene on their behalf.
  • Topic: Diplomacy, Treaties and Agreements, History, Trade
  • Political Geography: India, Asia, England, Tibet
  • Author: Monika Chansoria
  • Publication Date: 03-2020
  • Content Type: Policy Brief
  • Institution: Japan Institute Of International Affairs (JIIA)
  • Abstract: Bilateral defense cooperation agreements (DCAs) have become the most common form of institutionalized defense cooperation. These formal agreements establish broad defense-oriented legal frameworks between signatories, facilitating cooperation in fundamental areas such as defense policy coordination, research and development, joint military exercises, education and training, arms procurement, and exchange of classified information. Nearly a thousand DCAs are currently in force, with potentially wideranging impacts on national and international security outcomes. A theory that integrates cooperation theory with insights from social network analysis explains the significance and need for DCAs. Shifts in the global security environment since the 1980s fueled the demand for DCAs. Ever since, States are known to have used DCAs to modernize their militaries, respond to shared security threats, and establish security umbrellas with like-minded states. However, the DCA proliferation cannot be attributed to the demand factor alone. Nations are required also to overcome dilemmas of mistrust and distributional conflicts. Network influences can increase the supply of DCAs by providing governments with information about the trustworthiness of partners and the risk of asymmetric distributions of gains. Two specific network influences that can be identified here are—preferential attachment and triadic closure. They show that these influences are largely responsible for the post-Cold War diffusion of DCAs. Novel empirical strategies further indicate that these influences derive from the proposed informational mechanism. States use the DCA ties of others to glean information about prospective defense partners, thus endogenously fueling further growth of the global DCA network.
  • Topic: Defense Policy, Diplomacy, Treaties and Agreements, Bilateral Relations
  • Political Geography: Japan, India, Asia
  • Author: Cheol-Won Lee, Hyun Jean Lee, Mahmut Tekçe, Burcu Düzgün Öncel
  • Publication Date: 04-2020
  • Content Type: Policy Brief
  • Institution: Korea Institute for International Economic Policy (KIEP)
  • Abstract: The Agreement on Trade in Services and the Agreement on Investment between Korea and Turkey came into effect in August 2018. This article focuses on the construction sector and the cultural contents sector to seek possible cooperative measures between the two countries.
  • Topic: International Cooperation, Treaties and Agreements, Culture, Economy, Investment, Industry
  • Political Geography: Turkey, Middle East, Asia, South Korea
  • Author: Wendy Cutler
  • Publication Date: 07-2020
  • Content Type: Policy Brief
  • Institution: Asia Society Policy Institute
  • Abstract: Much attention has been focused on China’s unfair intellectual property practices and the imbalance in the U.S.-China trade relationship, but equally troubling are large-scale Chinese industrial subsidies, the behavior of state-owned enterprises (SOEs), and in general, the oversized and opaque role of the Chinese state in the economy. While the U.S-China phase one trade deal tackled some important sources of bilateral tension and aimed to boost Chinese purchases of U.S. goods and services, it was silent on industrial subsidies and related matters, leaving them for the next phase of negotiations, the fate of which is now in question. U.S. concerns on these matters are shared by other trading partners including the European Union (EU) and Japan. Yet despite widespread disapproval of such practices, building new global rules to combat subsidies has proven challenging. This is due to several factors, ranging from gridlock at the WTO, differences of views among like-minded countries on the required level of ambition, and uncertainty as to how best to approach the enormous complexities in China’s subsidies and related policies. The Organization for Economic Cooperation and Development (OECD) has sought to unpack this complexity, conducting recent studies of Chinese subsidies in two key sectors: aluminum and semiconductors. Both studies illustrate how Chinese subsidies are not simple cash handouts from the state to protected firms so that they can sell at favorable and distorting prices. The OECD finds subsidies can take various forms, including downstream or upstream help that trickles up or down to the firm that’s intended to benefit. They can take the form of favorable equity or debt purchases or bonds provided at below-market rates. And with interconnected global value chains, subsidies can effectively be granted covertly, intended to benefit one firm that might be several links away along the chain. In China, the problem is compounded by an opaque “party-state” structure that obscures not only the recipients of subsidies, but also the source. According to Mark Wu, a Harvard Law School professor who previously served as the Director for Intellectual Property in the Office of the U.S. Trade Representative, subsidies not only flow directly from government bodies in Beijing, but also indirectly through informal responses to directives — sometimes even left unsaid, but understood — from the Chinese Communist Party. Against this backdrop, the Asia Society Policy Institute (ASPI) convened two roundtables in the fall of 2019 and the spring of 2020 to discuss how best to build a new rules-based infrastructure that might combat such subsidies and prevent trade-distorting results such as unfair competition, market access barriers, and, above all, overcapacity in global markets. Experts from the private sector, think tanks, governments, and academia weighed in with possible solutions, which included: Negotiating new rules in the WTO; Using the WTO dispute settlement system, despite its often-discussed flaws; Forming ad hoc rules-based approaches, where possible, like the U.S-EU-Japan trilateral initiative; Plurilateral negotiations conducted on a sector-by-sector basis; Forming coalitions of like-minded trading partners to establish an alternative model, much in the way that the Trans-Pacific Partnership (TPP) was framed. During the roundtables, most experts agreed that there is no silver bullet that solves the subsidy and related issues on its own. And most agree that, left unaddressed, the problem is likely to deepen. The COVID-19 pandemic might even exacerbate it by leading to more state involvement in economies around the world and making it hard to discipline Beijing’s practices. Recognizing all of these real challenges that the international trade community faces, the roundtables reached the following key conclusions: Transparency on the scope, level, and nature of industrial subsidies is vital; Efforts to publicize the ongoing work in these areas, particularly that being done by the OECD, should accelerate; Turning research into tangible new policies is a key step; and Persuading China to agree to updated rules will be necessary, given that China is a singular contributor to overcapacity.
  • Topic: International Trade and Finance, Treaties and Agreements, Trade, Industry, WTO
  • Political Geography: China, Asia, North America, United States of America
  • Author: Thom Woodroofe, Brendan Guy
  • Publication Date: 04-2020
  • Content Type: Working Paper
  • Institution: Asia Society Policy Institute
  • Abstract: The United States is the world’s second-largest greenhouse gas emitter. For that reason, the outcome of the U.S. presidential election in November will have an undeniable impact on the future of the global climate change regime. This is especially the case now that the United Nations’ COP26 Climate Change Conference has been postponed to 2021 as a result of the COVID-19 pandemic. Indeed, as Asia and the rest of the world consider whether and how to step up their levels of ambition as part of the five-year ratchet mechanism of the Paris Agreement, the United States has the potential to be either a catalytic force for that effort going into 2021 or an even stronger spoiler of the Agreement’s ongoing effectiveness at a crucial juncture. No country will be watching more closely than China. The 2014 U.S.-China Joint Announcement on Climate Change between President Barack Obama and President Xi Jinping proved to be the watershed moment in the lead-up to the Paris Agreement, as the two countries signaled for the first time that they would act in a coordinated manner to combat climate change. Whether the United States and China can recapture that spirit of shared ambition in the future will have ripple effects on the positions of other major emitters as well — especially India, Japan, and Australia, which may not enhance their own levels of ambition without a stronger indication of further action by the United States and China. While President Donald Trump has begun the process of withdrawing the United States from the Paris Agreement and rolled back domestic and international measures to combat climate change, it is clear that if a Democrat is elected president in 2020, they would make combating climate change a defining priority of their administration. Therefore, a clearer understanding of the specific approach that would underpin the climate diplomacy of a potential new Democratic president can provide greater reassurance to the international community as countries consider their own levels of ambition in the lead-up to COP26 and beyond. This paper, therefore, assesses the international climate policies of both Vice President Joe Biden and Senator Bernie Sanders across six areas, including their proposals to reduce greenhouse gas emissions; engage with other major emitters, including China; use trade policy as a lever for climate action; increase climate finance and remove fossil fuel subsidies; take action across other sectors, and embed climate action as a core national security priority. The authors also lay out three cross-cutting considerations for a potential new Democratic administration to maximize their efforts in the global fight against climate change, including how they can best structure their administration; engage other major emitters most strategically; and use all tools in the toolkit to reduce emissions. This includes a number of specific recommendations for how the candidates’ existing policies can best be elaborated, including with regard to China; plans to host a world leader summit on climate early in a new administration; and the tabling of a new 2030 emissions reduction target. The likely constraints and choices that will confront a new U.S. administration as they determine their approach to climate action are also highlighted in the paper. This paper is the first in a series of policy products that the Asia Society Policy Institute will publish as part of a new project exploring the possibilities around U.S.-China climate cooperation.
  • Topic: Climate Change, Diplomacy, Government, Treaties and Agreements, Donald Trump, Carbon Emissions
  • Political Geography: China, Asia, North America, United States of America
  • Author: Jimmyn Pare
  • Publication Date: 01-2020
  • Content Type: Journal Article
  • Journal: Revista UNISCI/UNISCI Journal
  • Institution: Unidad de investigación sobre seguridad y cooperación (UNISCI)
  • Abstract: Under changing dynamics such as US-China relations, the domestic and foreign policies of South Korea’s new government under President Moon Jae-in have shown favor to China and North Korea, which is somewhat contrary to previous administrations that maintained pro-American policies. This situation is very similar to the geopolitical circumstances of the Joseon Dynasty during the late nineteenth and early twentieth centuries before Korea was occupied by Japan. This article analyzes and compares the geopolitical situations and Korea’s domestic and foreign policies of the two periods. By doing so, this article argues that policy makers should be more prudent when deliberating what should be achieved in order to enhance the future of Korea, rather than how to ensure their own personal legacy or ambition for political power.
  • Topic: Treaties and Agreements, Belt and Road Initiative (BRI), Reunification
  • Political Geography: Asia, South Korea, North Korea, Korea