This paper briefly outlines the evolution to date of the Trans-Pacific Partnership (TPP) and its potential strategic importance as a building block for eventual establishment of the Free Trade Area of the Asia Pacific (FTAAP). It then assesses the progress of the TPP initiative under four headings: as an FTA; as a region-wide agreement superimposed on an existing network of bilateral and plurilateral agreements among its members; as an instrument of United States’ re-engagement with East Asia; and as a “building block” for the FTAAP. The paper concludes with a discussion of the significance of the TPP for Japan.
This paper discusses institution building for macroeconomic and financial cooperation in East Asia. The issues covered include the Chiang Mai Initiative Multilateralization (CMIM); the regional safety net mechanism that evolved from regional cooperation initiatives started after the 1997 financial crisis. A number of proposals are put forward to make the liquidity support role of the CMIM more effective. Other issues covered are regional economic surveillance; the role of the ASEAN+3 Macroeconomic Research Office (AMRO), which will support CMIM; how AMRO may evolve to become the Asian Monetary Organization; and how the Finance Ministers’ process can be integrated with the Central Banks’ process to create a more effective institutional structure for the region.
JEL codes: E02, E44, F33, F36, F55
We set up a simple two sector, two factor Harris-Todaro model in which home and foreign duopolists compete in a Cournot-Nash way in the urban sector, while the rural sector is perfectly competitive. We introduce a cost asymmetry between home and foreign firms and a spillover of production technology from the foreign firm to the home firm. We then study the effects of the production subsidy/tax policy of the government for the duopolists on the urban unemployment, migration between urban and rural sectors and the welfare of the host country.
JEL Classification: F11, F12, F16
In this paper, we discuss how development assistance has been and should be designed in achieving development goals from views of Japan and East Asia. In pursuing successful ODA under the ODA governance structure, there are three necessary conditions: first, the aid allocation should be consistent with the global poverty targeting framework; second, ODA as a mode of capital inflows should be the one facilitating the recipients’ efforts and growth directly and indirectly; and third, aid governance should be designed to minimize transaction costs arising from aid proliferation. In achieving these three conditions, experiences of Japan and East Asia in providing ODA in an apolitical way to align international agendas, in utilizing loans to develop infrastructure, and in achieving borrowed technology-driven industrialization with rapid human capital accumulation, will provide important insights into setting future global development policies. Also, the “ODA Trinity”, i.e., complementarities between ODA, FDI, and economic growth, are the key in the next generation’s ODA policies. Finally, ODA can play an important role in facilitating regional cooperation in disaster management, because it is imperative to develop formal mechanisms across countries to diversify aggregate disaster risks.
This paper analyzes the impacts of free trade agreements (FTAs) from both quality and quantity aspects. The qualitative analysis of FTAs in terms of trade in goods, trade in services, direct investment and safeguard measures showed higher level of liberalization for FTAs involving developed countries than developing countries. The analysis of the quantitative effects showed a trade expansion effect for many FTAs. The analysis found various obstacles, which include high cost of obtaining a certificate of origin and low FTA preferential tariff margins, for using FTAs. The obstacles have to be removed, in order to increase the use of FTAs, thereby to promote foreign trade.
This paper examines whether altruism causes the transfer paradox in the model with two countries and two goods when the consumers of the donor and recipient countries have altruistic utility. We demonstrate that if the Walrasian stability condition is satisfied in the general equilibrium, the transfer paradox can never take place irrespective of the definition of utility. The result suggests that the motivation for transfer cannot be explained by the donor’s enrichment because it is not caused by the introduction of altruism into the model.
JEL Classification: F11, F35