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We have used the Michigan computable general equilibrium (CGE) model of World Production and Trade to calculate the aggregate welfare and sectoral employment effects of the menu of U.S.–Japan trade policies. The menu of policies encompasses the various preferential U.S. and Japan bilateral and regional free trade agreements (FTAs) negotiated and in process, unilateral removal of existing trade barriers by the two countries, and global (multilateral) free trade. The U.S. preferential agreements include the FTAs approved by the U.S. Congress with Chile and Singapore in 2003, those signed with Central America, Australia, and Morocco and awaiting Congressional approval in 2004, and prospective FTAs with the Southern African Customs Union (SACU), Thailand, and the Free Trade Area of the Americas (FTAA). The Japanese preferential agreements include the bilateral FTA with Singapore signed in 2002 and prospective FTAs with Chile, Indonesia, Korea, Malaysia, Mexico, Philippines, and Thailand. The welfare impacts of the FTAs on the United States and Japan are shown to be rather small in absolute and relative terms. The sectoral employment effects are also generally small in the United States and Japan, but vary across the individual sectors depending on the patterns of the bilateral liberalization. The welfare effects on the FTA partner countries are mostly positive though generally small, but there are some indications of potentially disruptive employment shifts in some partner countries. There are indications of trade diversion and detrimental welfare effects on nonmember countries for some of the FTAs analyzed. Data limitations precluded analysis of the welfare effects of the different FTA rules of origin and other discriminatory arrangements.

In comparison with the welfare gains from the U.S. and Japan bilateral FTAs, the gains from both unilateral trade liberalization by the United States, Japan, and the FTA partners and global (multilateral) free trade are shown to be rather substantial and more uniformly positive for all countries in the global trading system. The U.S. and Japan FTAs are based on “hub” and “spoke” arrangements. We show that the spokes emanate out in different and often overlapping directions, suggesting that the complex of bilateral FTAs may create distortions of the global trading system.

The multilateral liberalisation of trade in education under the General Agreement on Trade in Services (GATS) has achieved little progress. In a bid to overcome this lacklustre education trade liberalisation under the World Trade Organization (WTO), the purpose of this paper is to examine education trade bilateralism between Australia and India as an alternative to multilateralism. The end is to maximise bilateral trade liberalisation in education as a means to facilitate dynamic productivity gains, export opportunities, market competition, and FDI in the sector. The combined effect of this bilateralism would help accelerate economic growth in both countries, which is likely to generate domino effects on other WTO members, thereby contributing to the multilateral liberalisation of trade in services under the WTO.

The research methodology is analytical, based on pertinent empirical and secondary information.

Strong complementarities and synergies are found for the integration of trade in education services between Australia and India. Of the major exporters of education services, Australia enjoys the most competitive edge and comparative advantage in the Asia‐Pacific. India faces strong demands for quality education services due to its economic reforms and expansion requiring knowledge‐based workforce for high efficiency and productivity and has become a major importer of education services in the region.

The paper identifies new means of consolidating Australia and India's existing trade, niche areas of further opportunities, and potential challenges to be confronted for greater economic integration through trade in education. The originality of the paper lies in its core message that education trade bilateralism can be a valuable stepping stone, in many instances, to multilateral trade in education.

The purpose of this paper is to quantify and analyze the relative impact of agriculture Trade liberalization and South Asian Free Trade Agreement (SAFTA) over the global economic welfare. The objectives are to analyze and quantify the potential economic cost and benefits of the prospective trade between India and Pakistan to consumers, producers and government of the two countries by analyzing the potential economic costs and benefits of Pak‐India trade in exporting various consumer goods.

The Global Trade Analysis Project (GTAP) database is the database for the GTAP model of the world economy, which is publicly available. The main data source for this model is “The GTAP 4 Data Base” which is easy to adapt to appropriate sectoral and regional aggregations that allow one to focus on specific policy questions. The regional databases in the model are derived from individual country input‐output (I/O) tables that provide information about the individual regional economies in the model. The bilateral trade data are primarily derived from the United Nations Commodity Trade database. The economic research service (ERS) of the United States Department of Agriculture supplies the missing information in the UN trade data.

The first scenario is when normal trading relations with India will be restored; it means that each country will give the most‐favored‐nations (MFN) status to the other. In the second scenario, the SAFTA will be operative, and there will be free trade between India and Pakistan, and both countries will remove all tariffs and custom duties from each other's imports. The GTAP model is used to analyze the possible impact of SAFTA on Pakistan in a multi‐country, multi‐sector applied general equilibrium framework.

The analysis based on simulations reveals that current demand for Pakistani consumer items will expand after the free trade agreement (FTA) and consumer surplus will increase. The export of consumer items may be conducted by two scenarios, i.e. when normal trading relations between Pakistan and India will be restored and when there will be a free trade between Pakistan and India in the presence of SAFTA. Results based on this research reveal that, on SAFTA grounds, there will be net export benefits in Pakistan's economy.

The government of Korea considers the promotion of Free Trade Agreements (FTA) as necessary to develop its economy into an open trading nation. As for the countries with which the Korean government is actively investigating possible FTAs, there are Japan, Singapore, the Association of South East Asian Nations (ASEAN,) and Mexico. For the time-being, the FTA with Japan seems to be a critical one in practicing Korea s FTA policy. Recently, Korean industries show negative positions against a Korea-Japan FTA, with strong opposition from the labor union insisting that it is evident that Korea will sustain damages in the short-run and the dynamic (long-term) benefits are still ambiguous and uncertain. Regardless of whether their argument is correct or not, it will be difficult for Korea to conclude the FTA with Japan unless there is concrete confidence of balanced economic gains through the FTA between the two countries.

India and the Republic of Korea are two prominent democracies in Asia. Both countries had to fight for their long-desired freedom. India's growing friendly relationship with the Republic of Korea has been marked by mutual understanding and bilateral trading cooperation. India–Republic of Korea relations have made great strides in recent years and have become truly multidimensional, spurred by a significant convergence of interests, mutual goodwill, and high-level knowledge exchanges. This study intends to critically discuss how soft power has been applied in New Delhi–Seoul relations and how soft power has been a very effective tool to maintain unity among the Indian diaspora and the Korean community. Soft power has been beneficial for India in propagating India's films, culture, medicines, yoga, heritage, etc., through which India is generating revenue. The blending of liberal economic policy and knowledge-based soft power diplomacy has immensely helped in making reciprocal bilateral relations. South Korea's open market policies found resonance with India's economic liberalization and “Look East Policy” as well as “Act East Policy.” Similarly, India has opened up its economy through the adoption of “new economic policy.” With the trade liberalization, India had started vibrant trading relations with South Korea. The significant investment of Korean companies in India has made a strong base of economic relations. Both countries have developed their knowledge exchange programs in many ways.

This paper investigates the extent to which U.S. trade policies during 1922–1962 impacted the Pacific Rim economies differently from the rest of the world. Empirical analysis demonstrates that U.S. trade with the Pacific Rim had consistently higher tariff barriers than U.S. trade with the rest of the world among import-competitive manufactures. This paper then analyzes the reasons behind this phenomenon from both a political economy and a historical perspective. On both fronts, the Pacific Rim was at a disadvantage, and its higher barrier to trade with the United States was by no means historically accidental.

Among various distinctive formulations that have been developed simultaneously in East Asia as of 2009, this paper selected three major paths, ASEAN+3, ASEAN+6 and APEC, to quantitatively examine the economic impacts of Asian regionalization with the CGE model. This paper confirmed previous findings such as the magnitude of economic impact being proportional to the size of membership and the existence of trade diversion effect within all trade blocs. The subsequent KORUS and Korea-EU FTA imposition upon the built CGE base models further verified the effects of hub-and-spoke-ism in East Asia. Jointly, the simulation results implied that the economic impacts of a trade arrangement heavily depend on the subject economy’s reliance on trade with the participating states. It was also found that the impacts were directly proportional to the accrued trade balance of the subject spoke country with both the hub state and the hub-destination. This could have been exaggerated as the scope of this study was limited to East Asia where KORUS FTA was found to be more influential than Korea-EU FTA due to its exceptionally high reliance on the US. On the course of this research to verify the aforementioned findings, however, both GTAP 6 and 7 were adopted, and hence, the economic impacts of China’s accession to the WTO in the global trade system were also empirically proven.

The purpose of this paper is to get more insight about the importance of globalisation and regional integration for global value chains (GVCs) upgrade and economic growth.

It uses South Korea as an illustrative example of pursuing sustained economic growth via economic globalisation and moving up the value chains. It provides answers to two questions. First, how did South Korea manage to achieve economic growth via moving up the value chains? Second, what are the governmental efforts on globalisation and trade liberalisation that have contributed to this success?

Among other factors, its success can be seen as a result of a combination of domestic development strategy and policies and its efforts to create a “development-friendly” global and regional circumstance via strengthening the economic ties with main powers, expanding the free trade agreements network, and deepening integration into Factory Asia. It is of South Korea’s interest to push forward the progress of regional integration.

Many countries have successfully got rid of poverty by participating international production sharing, but only few of them have managed to move further and eventually upgrade to be an advance economy. This case study of South Korea gives us more insight about the importance of globalisation and trade liberalisation in supporting GVCs upgrade.

This paper aims to examine the influence of exchange rate risk on the bilateral trade of two closely connected East Asian open economies – Malaysia and Singapore – at industry level.

This study estimates import and export demand models considering 65 import and 65 export industries of Malaysia, with Singapore using monthly data over the period 2000-2014. Generalized Auto Regressive Conditional Heteroskedasticity (GARCH) model is used to measure the exchange rate risk, and autoregressive distributed lag (ARDL) approach to co-integration is used to examine the study empirical models.

The findings suggest that exchange risk has an impact on a moderate number of industries in the short run; however, this influence endures in very few industries in the long run. It is interesting to note that exchange rate volatility expedites import demand for the large Malaysian import industries like gas and plastic.

No prior study has explored the topic at industry level focusing on the bilateral trade flows between Malaysia and Singapore. This research serves important implications while thinking about exchange rate risk and trade linkage in a case of open economies trade pairs that are highly integrated in presence of a variety of bilateral trade agreements and economic groupings.

This chapter applies the new heterogeneous firm CGE model of Caliendo and Parro (2009) to determine what the Ricardian gains are from changing partners for members of a trade bloc. We focus on the MERCOSUR case, using a model with 48 sectors and 5 countries. Motivated by recent policy discussions, we quantify Uruguay's trade and welfare effects from signing a Free Trade Agreement with the United States and leaving MERCOSUR. We find positive welfare effects for Uruguay from bilaterally reducing tariffs with the United States. Most of the gains come from having access to lower-cost intermediate inputs for production. We then consider the policy experiment of bilaterally eliminating tariffs between all members of MERCOSUR and the United States. We find that Uruguay has the largest gains, while Argentina and Brazil do not benefit much. This chapter also illustrates how new models are a promising tool for the analysis of trade.