Regional Integration in Asia: The Role of Infrastructure

Abstract

The rapid growth of intra-Asian trade, especially in the last couple of decades, represents both a marked shift in export orientation and an increasing integration of regional markets. In 2005, half of total Asian exports were destined for regional consumption, and a further rise can only be expected given the high growth rates of intraregional trade, peaking at 25% in 2004 (World Trade Organization [WTO] 2006). Against such a backdrop, the surge of regionalism in Asia today comes as no surprise. Nowhere in the world is the proliferation of regional integration arrangements (RIAs) more evident than in Asia today. As of September 2006, the individual East and South Asian countries considered in this study were involved in 301 free trade negotiations or signed agreements. While political and security motives are also influential, the economic imperative to further feed the market’s appetite for more regional trade is clearly driving policy agents along the track toward free trade agreements (FTAs).