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Dr. Takashi Terada
Professor, Organization for Asian Studies,
Waseda University, Japan

This lecture addresses the issues related to FTA policies in Japan. Japan shifted its trade policy from a WTO-oriented single-layered approach to a multi-layered approach involving not only the WTO-centered multilataral framework but also regional and bilateral FTA frameworks. The discussions in the lecture provide the reasons behind this shift and analyze the economic impacts of the new strategy. Based on the recognition of positive impacts of the new FTA approach, several suggestions are provided to pursue the new approach.
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Lecture 2 (provided by Dr. Terada):

The second lecture addresses the following three questions on Japan�fs FTA policy: 1) how is Japan�fs FTA policy characterized, 2) who supports and opposes FTAs in Japan and 3) what stance does Japan take for East Asian integration? The first question argues a reason why Japan�fs FTA is called Economic Partnership Agreement and shows its complex trade policy making system. The second question highlights big business�f interests in FTA and the agricultural sector�fs opposition against FTA. The final question reveals Japan�fs strong interest in an East Asian integration and its approach towards realising it.

The lecture deals with Thailand�fs FTA policy in various aspects.  Starting with the history of Thai Trade Policy, I highlight why Thailand came to embrace FTAs.  Reviewing the progress to date of FTA negotiations between Thailand and many partner countries, the lecture discusses the characteristics of Thai FTAs and how they are shaped by domestic politics.  Case studies will be provided to make the points, particularly on Japan-Thailand Economic Partnership Agreement (JTEPA).  The lecture concludes by linking FTAs with the process of East Asian itnegration with the emphasis on the Thai stance on the issue.

The objectives of both lectures are to examine Malaysia�fs trade strategies at the multilateral, regional and bilateral level.  In the first lecture, I will first of all provide a historical review of Malaysia�fs trade policies to enable the students to have some basic understanding of Malaysia.  This historical overview spans the period from before Independence in 1957 to the current period. It therefore covers the four main phases of trade policies in the country.  Since Malaysia has been a member of GATT (the predecessor of the WTO) since 1957 and it is also one of the founding members of the WTO, the lecture will also discuss Malaysia�fs commitments under the WTO.  It further examines Malaysia�fs views of multilateral liberalization under the current Doha Round.  At the regional level, Malaysia as a member of ASEAN, is also involved in ASEAN�fs extra regional arrangements.  The lecture will also explain the circumstances and reasons for Malaysia�fs venture into Free Trade Agreements (FTAs) in recent times.  Finally, it will summarize the FTAs that have been signed and that are also currently being negotiated. 

For the second lecture, I will focus on the characteristics and scope of the FTAs of Malaysia.  As Malaysia has signed only one FTA thus far, namely the Malaysia-Japan Economic Partnership Agreement (or the MJEPA), the lecture will focus on the details of this agreement.  In particular, it will highlight the commitments that are WTO-Plus, especially in the automotive sector as this is considered to be a sensitive sector for Malaysia.  The liberalization of this sector is considered to be a real achievement for the Japanese as it is a highly protected sector.  It further discusses the proposed Malaysia-US FTA (MUSFTA) that is currently being negotiated.  Finally, it will compare the MJEPA with the proposed MUSFTA so that the students can have a better understanding of the problems involved in the current negotiations with the US. 

The lecture has a substantial discussion of China�fs unbalanced growth model. This growth model has helped China achieve rapid economic growth over the last couple of decades. But it has increasing costs. Low consumption, high saving and investment and high trade dependency are among the emerging costs.

After a detailed discussion of the nature of the unbalanced growth model, the lecture discussed its implications for the global imbalances and current financial crises. The lecture ends up with the implications for FTAs policies. A punch line is that given the global imbalance and intrinsic fragility, FTAs and other regional trade agreements should play a more important role in near future.

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Prior to the 1990s, it was inconceivable to talk about economic integration, much less a free trade area, in Southeast Asia.  This stems from the fact that most countries in the region have economic structures that are competitive rather than complementary.  With the exception of Singapore, the countries have similar resource endowments and levels of technological development; thus, resulting in the production and export of similar primary and labor-intensive products.  They are also all heavily dependent on the developed countries, particularly the USA, Europe and Japan, for their export markets and sources of investment and technology.  These factors were perceived to make economic integration in the region difficult, if not impossible.  It was a major political decision then when the leaders finally decided to establish the ASEAN Free Trade Area (AFTA) in 1992.

This session examines the bilateral and regional linkages of the ASEAN.  It is divided into two major parts.  The first part presents an overview of the ASEAN since the organization was established in 1967.  This is followed by a discussion of ASEAN�fs trade policy, particularly the lessons that can be drawn from the region�fs experience with AFTA. The second part examines the forces behind the emerging role of ASEAN as the hub for bilateral and regional trading arrangements in East Asia. Why has the ASEAN become more anxious to expand and deepen regional integration?  Why have other countries, within and outside Southeast Asia, become eager to link with the ASEAN?  This is followed by a discussion of the economic partnerships and free trade agreements (BTAs/RTAs) the ASEAN as a group is negotiating with economies inside and outside of East Asia.  What are the implications of these BTAs and RTAs to the formation of the ASEAN Economic Community (AEC) and the East Asian Economic Community (EAEC)?