Endnotes

¹See Yoshitomi (2007) and Park and Shin (2009) and the works cited therein.

²For a detailed discussion on export patterns in East Asia, see Athukorala and Kohpaiboon (2008).

³For a discussion, with a detailed listing of the relevant literature, of the causes of the continued preeminence of East Asia in this new form of international exchange see Athukorala and Yamashita (2009).

⁴The patterns are strikingly similar for Developing East Asia, ASEAN+ 3 and ASEAN.

⁵See for example Lee and Roland-Holst (1998); Urata (2006); Yoshitomi (2007); and Kawai and Wignaraja (2008).

⁶The 15 initial member countries of the EU (Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxemburg, Netherlands, Norway, Portugal, Spain, Sweden, United Kingdom.)

⁷Member countries of the ASEAN, the PRC, Japan, and Korea.

⁸The patterns are strikingly similar for developing East Asia, ASEAN+ 3 and ASEAN.

⁹As argued in Kohpaiboon (2008), when analysis undertaking at the 6 digit HS level, it is likely to find mismatched cases in which official records of preferential trade far exceed actual trade simply because it is likely for firms to make mistakes in identifying their own HS codes at the very high disaggregated level. But when the 6-digit-HS level is aggregated to 4 digit HS levels, mismatching cases disappear.

¹⁰ROOs relating to TV sets (HS852812) in the Thailand-Australia Free Trade Agreements (Annex 4.1) can be used to illustrate this point. To become eligible for preferential tariffs, TV producers must source three parts (HS701120, 854011, and 854091) locally. But item 854011 (TV Picture Tubes) are not domestically available; Thai color TV assembly is viable only if this item is procured from Japan; Taipei,China; or Korea. Thus, even though preferential tariffs on TVs under the FTA (20%) is very attractive, the Thailand-Australia FTA is virtually irrelevant for TV assembly plants located in Thailand.

¹¹This study is based on a survey the use of FTA tariff concessions by Japanese firms conducted in early 2006. According to a follow-up survey conducted by the authors in early 2009, the usage rate of tariff concessions under the Japan-Mexico FTA increased from 15% at the time of the previous survey to 35% in 2008. This finding seems to suggest that the utilization rates of FTA concessions tend to increase over time as increasing awareness of the benefits of new tariff concessions gets wider publicity in the business community and firms become familiar with the related administrative procedures (based on comments at the ADBI Conference by Professor Urata).

¹²A firm commitment as part of the FTA to not to increase existing tariff and non-tariff barriers against nonmember is unlikely to avert this threat because an Asia-wide FTA, given that it encompasses a number of significant global trading nations, is likely to involve significant trade diversion even under the existing extraregional tariffs.

¹³See for instance the recent article wrote by the Chinese Minister of Trade in the Wall Street Journal (Deming 2009).

¹⁴I owe this point to a comment at the ADBI Conference by Professor Shujiro Urata.

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