This chapter explores recent free trade agreement (FTA) initiatives by Thailand and Malaysia. It is shaped with reference to the concept of cross-regional trade agreements (CRTAs) developed by Mireya Solis and Saori Katada in the framework chapter of this book. It notes that each government, while remaining committed to the regional trade liberalization processes manifest in the APEC, the ASEAN AFTA, and the ASEAN plus Three (ATP) talks, has recently begun bilateral free trade negotiations. And each has reached beyond the Asian region to find negotiating partners. Their declared motive for going cross-regional was expectation of economic gain. This is evident in their efforts to secure access to the American, South Asian, Middle Eastern, and Australian markets and to attract investment from these economies. But this rationale must be qualified because the markets and investment sources of many Asian governments’ extra-regional partners are relatively small in Asian terms, and their trade and investment barriers are already amongst the lowest in the world. This is especially true of New Zealand and Chile, which are popular extra-regional partners for Asian governments.
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References
Mireya Solis and Saori Katada’s chapter “Permeated Regionalism in East Asia: Cross-Regional Trade agreements in Theory and Practice”, in this volume.
Vinod K. Aggarwal and Shujiro Urata, eds., Bilateral Trade Arrangements in the Asia-Pacific: Origins, Evolution, and Implications, (New York, NY: Routledge, 2006); Christopher Dent, New Free Trade Agreements in the Asia-Pacific (Basingstoke, Hampshire; New York: Palgrave Macmillan, 2006); Jiro Okamoto, ed., Whither Free Trade Agreements? Proliferation, Evaluation, and Multilateralization (Tokyo: Institute of Developing Economies, 2003); ASEAN Economic Bulletin, vol. 22, no. 1 (April 2005), special issue on Southeast Asian FTAs, especially the overview by Sally and Sen pp. 92–116. Also see Ramkishen Rajan and Rahul Sen, “The New Wave of FTAs in Asia: Implications for ASEAN, China and India”, Asian Economic Cooperation and Integration, (Manila: Asian Development Bank, 2005), pp. 123–160.
This point is underscored by an anonymous reviewer who asserts that Singapore exerts an influence that few Asian leaders care to admit to in public.
Stephen Hoadley, Negotiating Free Trade: The New Zealand-Singapore CEP Agreement (Wellington: New Zealand Institute of International Affairs, 2002), pp. 21–23.
The most comprehensive work on Singapore FTAs is Rahul Sen, Free Trade Agreements in Southeast Asia (Singapore: Institute of Southeast Asian Studies, 2004). Also see Margaret Liang, “Singapore’s Trade Policies: Priorities and Options”, ASEAN Economic Bulletin, vol. 22, no. 1 (April 2005), pp. 49–60; Seungjoo Lee, “Singapore’s Trade Bilateralism: A Two-Track Strategy”, in Aggarwal and Urata, eds., Bilateral Trade Arrangements in the Asia-Pacific, pp. 184–205; Koh and Chang Li Lin, eds., The United States Singapore Free Trade Agreement Highlights and Insights; Also see Michael Leifer, Singapore’s Foreign Policy: Coping with Vulnerability (New York, NY: Routledge, 2000) and N. Ganesan, Realism and Interdependence in Singapore’s Foreign Policy (New York: Routledge, 2005).
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Prime Minister Mahathir was reported by the Bangkok Post on 27 February 2001 as expressing suspicion that Singapore’s FTAs would evade the AFTA rules of origin: “We have to watch this very carefully because this can be a backdoor entry into AFTA”. And Trade Minister Rafidah Aziz was reported by The Nation on 6 July 2002 as having said: “In the case of free trade agreements where you bargain on tariff concessions…then it is going against AFTA rules and cannot be done”. See Nagai, Thailand’s Trade Policy, p. 1. In response to Singapore’s FTA with New Zealand, Malaysia’s foreign minister in 2000 said, “When we do something outside the ASEAN context which could weaken the organization, we must think twice”. See Suzuki, “Linkage between Malaysia’s FTA Policy and ASEAN Diplomacy”, p. 298.
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Christopher Dent, “Bilateral Free Trade Agreements: Boon or Bane for Regional Co-operation in East Asia”, European Journal of East Asian Studies, vol. 4, no. 2 (December 2005), pp 287–314 and “The New Economic Bilateralism in Southeast Asia: Region-Convergent or Region-Divergent?” International Relations of the Asia-Pacific, vol. 6, no. 1 (2006), pp 81–111, and “The International Political Economy of ASEAN Economic Integration and Bilateral FTAs”, Sudostasien Aktuell (Journal of Current Southeast Asian Affairs), Institute of Asian Studies, Hamburg, Issue 1, 2007, pp. 16–51. For his book-length treatment of this important theme see Dent, New Free Trade Agreements in the Asia-Pacific.
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Hoadley, S. (2008). Thailand's and Malaysia's Cross-Regional FTA Initiatives. In: Katada, S.N., Solís, M. (eds) Cross Regional Trade Agreements. The Political Economy of the Asia Pacific. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-79327-4_5
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