Pan-Asian Integration: Economic Implications of Integration Scenarios

Abstract

An alphabet soup of regional trade agreements has proliferated in recent years. Such agreements include the North American Free Trade Agreement (NAFTA), the European Free Trade Association (EFTA), the European Union (EU), the Southern Common Market (MERCOSUR), Association of Southeast Asian Nations (ASEAN), and the South Asian Free Trade Agreement (SAFTA). Some of these regional initiatives have been very successful in integrating markets for goods and services, while others have gone through cycles of periodic collapse and revival. The most successful regional initiatives have been in North America and Europe. Success has been more limited in Asia. There is interest, though, in pursuing deeper regional integration across Asia. This includes subregional initiatives in East and South Asia, both through deepening of existing agreements and the creation of new ones.¹