2 results
7 - Panel Discussion
- from Part II - STATES, MARKETS AND THE MOVEMENT OF PEOPLE
-
- By Takashi Shiraishi, Institute of Developing Economies, JETRO, Masahiko Hayashi, ILO Office in Japan, Peter J. Katzenstein, Cornell University, Vikram Nehru, World Bank, Jiro Okamoto, Institute of Developing Economies, JETRO, Isamu Wakamatsu, Senior Coordinator (ASEAN and South Asia)
- Edited by Takashi Shiraishi, Jiro Okamoto
-
- Book:
- Engaging East Asian Integration
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 28 September 2012, pp 193-214
-
- Chapter
- Export citation
-
Summary
Shiraishi: I am supposed to wrap up the speeches and presentations made so far, but I am not going to do this because so many points were raised that I simply cannot summarize or wrap up all these. Instead, I would rather go directly into the discussion given the fact that time is quite limited. I start the discussion by raising perhaps two or three questions.
Professor Katzenstein's lecture was very comprehensive and I suspect that many people here find it quite different from the kind of discussions you normally hear about East Asian regional integration. Normally, it is economists, rather than political scientists or area specialists, who talk about integration. The kind of language deployed in discussing regional integration is very often, or almost, always economistic, but here, it is not the case and I hope that this already shows a different way of looking at regional development.
A number of people raised the question of the importance of the current [global financial] crisis. I would like to ask Professor Katzenstein about the implication of the current crisis for the American imperium.
And another thing I noted, and found quite interesting, is the point Dr Surin Pitsuwan made in his eloquent speech and excellent presentation. Dr Okamoto argued that the kind of institution building over the last ten years or more in this region is offering us quite different perspectives. Dr Surin emphasized the centrality of ASEAN as well as incrementality. Dr Okamoto agreed with some of the points Dr Surin made, but stated that ASEAN is not exactly in the driver's seat. I would like to invite Dr Okamoto as well as others to respond to this point.
And finally, I invite some of the people to think about the ways in which the region or regional institutions which have been created over the last decade can be deployed to deal with the current crisis. I have in mind, of course, the Chiang Mai Initiative, and the questions of how feasible it is, what the role of the World Bank is, and of the Japanese Government and so on. Maybe Dr Nehru can at least comment on this.
3 - Building a Neighbourhood — One Policy at a Time: The Case for Deeper Economic Integration in East Asia
- from Part I - EVOLUTION OF EAST ASIAN INTEGRATION
-
- By Hamid Alavi, World Bank, Ralph Van Doorn, World Bank, Vikram Nehru, World Bank
- Edited by Takashi Shiraishi, Jiro Okamoto
-
- Book:
- Engaging East Asian Integration
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 21 October 2015
- Print publication:
- 28 September 2012, pp 46-94
-
- Chapter
- Export citation
-
Summary
INSIGHTS ON THE BENEFITS OF EAST ASIAN INTEGRATION
The benefits of regional integration are greater than previously realized. This section summarizes the main benefits of regional integration as documented in the literature on this, and discusses recent work that suggests that regional integration can be even more beneficial than previously realized, especially if the potential associated risks of integration are managed properly.
The Benefits of Regional Integration
Conventional Analysis Stresses Specialization as the Driver of Benefits
The conventional analysis of the benefits of regional integration focuses on trade in goods and emphasizes trade and location effects. The preferential reduction in tariffs through regional agreements induces a shift in demand towards exports from partner countries at the expense of domestic production (trade creation) and away from exports from non-member countries (trade diversion). According to this view, trade creation improves welfare, trade diversion reduces it. Changes in trade flows induce changes in the location of production between member countries of a regional agreement based on static comparative advantage (specialization).
New Insights Identify Economies of Scale and Agglomeration Economies as the Key Driver
The new economic literature — sometimes called the “new international trade theory” — summarized in An East Asian Renaissance (Gill and Kharas 2007) and World Development Report (World Bank 2009), emphasizes the increasing role of economies of scale and agglomerations economies as central forces driving international trade, the geographical concentration of economic activity, and economic growth. While this theory was developed in the late 1970s (Krugman 1979), empirical support has been more recent. The premise of the new thinking is that when trade barriers fall, firms gain access to bigger markets, allowing them to expand production and reap economies of scale. But openness also exposes them to competition from rival foreign firms, paring their margins. As such, some firms may go out of business, but between the domestic survivors and the foreign entrants, consumers will have more variety of goods to choose from. Thus the main gains from trade arise not from specialization, but from economies of scale, fiercer competition, and increased consumer choice that regional integration and, eventually, globalization provide.