East Asian Value Chains and Economic Effects of Free Trade Agreements

Nakgyoon Choi () and Young Gui Kim ()
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Nakgyoon Choi: Korea Institute for International Economic Policy
Young Gui Kim: Korea Institute for International Economic Policy

No 14-25, World Economy Brief from Korea Institute for International Economic Policy

Abstract: The rise of global value chains has changed the trade and investment patterns in East Asia. The intra-regional trade of intermediate goods in East Asia turned out to increase compared to the EU and the US, and East Asian value chains have grown rapidly in recent years. This paper calculates the indicators to show how the global value chains have deepened in each region by using the World Input-Output Tables which cover 41 countries and 35 sectors during 1996-2009. The results from this study provide some policy recommendations as follows. Global trade liberalization is needed to maximize the positive effects expected from the global value chains. East Asian countries also need to harmonize the border measures including standards, SPS, and TBT which are expected to facilitate global value chains in the region. The liberalization of services such as distribution, finance, and business services among others are also expected to contribute to efficient movement of goods and materials in the intra- and inter-region trade. Specifically, the East Asian countries need to harmonize the intra-regional bilateral FTAs to reduce the so-called noodle bowl effects.

Keywords: FTA Policy; Regional Comprehensive Economic Partnership; Free Trade Agreements; East Asian Value Chains; Global Value Chains; East Asia (search for similar items in EconPapers)
Pages: 5 pages
Date: 2014-06-27
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2014_025

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