Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA) Conference: FTA Impacts Studies
Post-event Statement
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The conference on FTA Impacts Studies was successfully held in Tokyo, Japan on 26 January 2009. It was co-organized by Asian Development Bank (ADB), Asian Development Bank Institute (ADBI), and Inter-American Development Bank (IDB) under the framework of the Latin America/Caribbean–Asia/Pacific Economics and Business Association (LAEBA). The conference was divided into four sessions where the first three sessions highlighted the results of various countries firm-level surveys on the business impacts of Asian and Latin American foreign trade agreements (FTAs). The findings show that awareness plays a fundamental role in FTA utilization rates, and that while current costs associated with multiple FTAs are not a serious concern to businesses, there are indications that the problem could worsen in coming years. Thus it is vital that policymakers begin to address these issues now to mitigate foreseeable problems.
The final session was a panel discussion that included representatives from government and industry, on possible policy prescriptions in fostering FTA usage and avoiding potential pitfalls. Recommendations included greater involvement of industry associations and targeted support for SMEs.
The conference was attended by policymakers from Asia and Latin America, representatives of the academe, government, non-government, and private institutions.
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Background
The spread of free trade agreements (FTAs) has triggered concerns about harmful noodle bowl effects which may raise trade-related business costs, especially for small- and medium-sized enterprises. These concerns are shared among Asian and Latin American economies. Costs can arise from different and competing tariffs, standards, and rules in overlapping FTAs. Yet others argue that, in the absence of a Doha deal, FTAs are a second-best tool and provide more opportunities than barriers for these enterprises.
Firm-level evidence on FTA impacts has been lacking in both regions. The Asian Development Bank and Inter-American Development Bank have attempted to fill this gap by providing new data to inform the debate on East Asian and Latin American FTAs. New firm-level evidence on the business impact of FTAs has been gathered through surveys in several countries in the two regions. The focus of the studies is on the market access issues of FTAs to assess the severity of the noodle bowl effect on goods.
Objectives
The objectives of this workshop are to: - discuss and understand the likely impacts of the FTAs on businesses and export capacities;
- assess the usefulness and effectiveness of regional cooperative arrangements in mitigating or exasperating such impacts; and
- formulate recommendations for designing Asia’s response to the proliferation of such agreements, especially in light of the global financial crisis and slowdown of the global economy.
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