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12. Exploring Digital Economic Agreements to Promote Digital Connectivity in ASEAN
- Author:
- Sarah Y. Tong, Yao Li, and Tuan Yuen Kong
- Publication Date:
- 07-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper explores modules and articles on cooperation concerning the digital economy that are applicable for Association of Southeast Asian Nations (ASEAN) countries under certain circumstances. It investigates the progress of and obstacles to ASEAN’s digital connectivity, as well as features of existing Digital Economic Agreements and digital economy-related articles in other agreements. We propose the use of a differentiated strategy and steps to promote integration for ASEAN countries covered in this research.
- Topic:
- Economics, Globalization, International Trade and Finance, Digital Economy, and Digitalization
- Political Geography:
- Asia and Southeast Asia
13. Effective Rates of Protection in a World With Non-Tariff Measures and Supply Chains: Evidence from ASEAN
- Author:
- Ben Shepherd
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The concept of effective rate of protection expresses protection on a sector’s final output relative to protection affecting its inputs. As such, it is well adapted to analysing the effects of trade policy from a supply chain standpoint. This paper makes two contributions to the literature on effective rates of protection. First, it draws on the literature on trade in value added to highlight an alternative to the traditional measure that better accounts for supply chain trade by considering both direct and indirect input use. Second, it includes data on ad valorem equivalents of non-tariff measures, which are increasingly important as trade policy instruments. In an analysis covering 17 aggregate goods sectors, I find that average tariff only effective rates of protection in ASEAN averaged 6.9% and ranged from zero to 23.4% in 2018. By contrast, effective rates including non-tariff measures averaged 14.0% and ranged from –6.2% to 44.0%. While patterns of escalation and even effective taxation differ substantially across sectors, most countries practice a tariff and NTM trade policy that is broadly neutral between input and output sectors, but which causes low to moderate isolation from world markets. Given the complexity of tariffs and NTMs from a supply chain perspective, there would likely be reductions in economic waste accompanying substantial simplification.
- Topic:
- Economics, Globalization, International Cooperation, International Trade and Finance, Protectionism, Non-Tariff Measures, and Supply Chains
- Political Geography:
- Asia and Southeast Asia
14. The EU–China Comprehensive Agreement on Investment: Lessons Learnt for Indonesia
- Author:
- Yan Lili Ing and Junianto James Losarili
- Publication Date:
- 08-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- The European Union (EU) and China have recently reached an agreement: the EU–China Comprehensive Agreement on Investment (CAI). As one of the most recent investment agreements concluded by the EU, the paper aims to assess specific concessions made in the agreement, and provides lessons learnt for Indonesia on the ongoing negotiations of the Indonesia–EU free trade agreement, the Comprehensive Economic Partnership Agreement (IEU CEPA). The paper will present an overview of the main areas covered under the CAI, assess the potential impacts of the CAI on EU investment into Indonesia, and set out lessons that can be learnt from the CAI.
- Topic:
- Economics, International Cooperation, International Trade and Finance, European Union, and Investment
- Political Geography:
- China, Europe, Indonesia, and Asia
15. The Trade Restrictiveness Index and Its Impact on Trade Performance in Selected East Asian Countries
- Author:
- Norlin Khalid, Muhamad Rias K.V. Zainuddin, Tamat Sarmidi, Sufian Jusoh, Faliq Razak, and Mohd Helmi Ali
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper aims to investigate the effect of non-tariff measures (NTMs) on trade in selected East Asian countries. In doing so, we first estimate the ad valorem equivalent (AVE) of NTMs and construct an augmented trade restrictiveness index (ATRI) by measuring the overall external regulations imposed by importing countries. Second, we analyse the effect of the AVE and trade restrictiveness index (TRI) of importing nations on the exports of various sub-sector products for each country in selected East Asian countries. Based on a standard gravity model framework, we perform a Poisson pseudo maximum likelihood (PPML) regression at the sectoral level (Harmonized System 2-digit) for total exports and major sub-sectors (agri-food, health, logistics, and manufacturing). The findings show that the ATRI has a negative and significant relationship towards bilateral exports for total exports, manufacturing, and logistics sub-sectors. The negative impacts of the ATRI also highlight that trade barriers play a significant role in bilateral exports. NTM restrictions (proxied by the calculated AVE of NTMs) imposed by importing countries have mixed results for technical and non-technical measures. Where technical measures have negative and significant impacts on bilateral exports for total exports, manufacturing, and health sub-sectors. This implies that implementation of technical NTMs such as sanitary and phytosanitary (SPS) and technical barrier to trade (TBT) measures in importing nations adversely affect bilateral exports for these sub-sectors. This is in line with our hypothesis, as exporters may face difficulties in meeting the current NTM specifications, leading to lower bilateral exports. In addition, the results show that most trade agreements have a positive and significant relationship with ASEAN and East Asia countries’ bilateral exports, suggesting that free trade agreements enhance trade between countries.
- Topic:
- Economics, Globalization, International Trade and Finance, and Non-Tariff Measures
- Political Geography:
- East Asia and Asia
16. Regulatory Distance, Margins of Trade, and Regional Integration: The Case of the ASEAN+5
- Author:
- Chandran Govindaraju, Neil Foster-McGregor, and Evelyn Shyamala Devadason
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper measures regulatory distance in non-tariff measures (NTMs) to examine the regulatory distance patterns and how the margins of trade respond to regulatory distance for the ASEAN+5 economies (the 10 Association of Southeast Asian Nations Member States plus Australia, China, India, Japan and New Zealand). It decomposes the margins of trade and regulatory distance by sector (agriculture and manufacturing) and NTM type (technical, non-technical, sanitary and phytosanitary (SPS), technical barriers to trade (TBTs), and pre-shipment inspections and other measures) for the 15 countries. At the country level, the results indicate a varying regulatory distance amongst the ASEAN+5 countries. Regulatory implementation also varies by sector and by the type of measure. Within sectors, SPS regulatory distance is higher in the agriculture sector, while for manufacturing, the regulatory distance in TBTs is higher. Notably, few countries recorded a higher regulatory distance for non-technical measures and pre-shipment inspections. Interestingly, for the ASEAN region, there seems to be no evidence supporting a reduction in regulatory distance from 2015 to 2018, despite efforts to harmonise NTMs since 2015. The results indicate that regulatory distance largely has a trade-reducing effect along the trade margins within ASEAN+5 bilateral trade. Technical measures have a greater trade-reducing effect than other measures along extensive and intensive trade margins – specifically SPS in the agriculture sector and TBTs in the manufacturing sector. Notably, there is also evidence of non-technical measures and pre-shipments and other formalities impacting trade along extensive margins, despite efforts to establish trade facilitation. The paper also describes some policy implications.
- Topic:
- Economics, International Cooperation, International Trade and Finance, Regulation, and Regional Integration
- Political Geography:
- Asia and Southeast Asia
17. The Global Economic Impact of the COVID-19 Pandemic: The Second Wave and Policy Implications
- Author:
- Gyeong Lyeob Cho, Minsuk Kim, and Yun Kyung Kim
- Publication Date:
- 09-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This paper examines the macroeconomic impact of the COVID-19 pandemic through the Computable General Equilibrium model. Due to a second wave and a subsequent delay in economic recovery, the pandemic could lead to a permanent shock in capital accumulation and productivity. This implies that the shock may not merely affect the short-term growth rate but also negatively impact the future economic growth path from its pre-pandemic trend. Through simulations, in the mild scenario, countries lose 0.10% to 0.31% of their future economic growth rates; in the severe scenario, they lose 0.21% to 0.69%.
- Topic:
- Economics, Globalization, International Trade and Finance, Public Health, Pandemic, and COVID-19
- Political Geography:
- Global Focus
18. Spillover Effects of Social and Economic Interactions on COVID-19 Pandemic Vulnerability Across Indonesia’s Regions
- Author:
- Ernawati Pasaribu, Puguh B. Irawan, Tiodora H. Siagian, Ika Yuni Wulansari, and Robert Kurniawan
- Publication Date:
- 10-2021
- Content Type:
- Research Paper
- Institution:
- Economic Research Institute for ASEAN and East Asia (ERIA)
- Abstract:
- This research study focuses on measuring the possible spillover effects of socio-economic interactions on COVID-19 pandemic vulnerability across Indonesia’s regions by utilising a spatial simultaneous model. The COVID-19 pandemic vulnerability level here is used to indicate the extent to which a region is susceptible to the spreading COVID-19 pandemic, as determined by not only the region’s COVID-19 related epidemiological factors but also by its relevant socio-demographic and economic aspects, housing, environmental health, and availability of health facilities. High COVID-19 pandemic vulnerability levels were mostly found in districts in Java Island and southern Sumatera, suggesting high population density and mobility in both regions. It was revealed that 31 districts have low COVID-19 risk levels (from epidemiological indicators-related measurements), but they have high COVID-19 vulnerability levels (from epidemiological and socioeconomic indicators-based measurements). Labour productivity was found to have a reciprocal relationship with COVID-19 vulnerability, proving that the COVID-19 pandemic has a significant impact on labour productivity and vice versa. On the other hand, regional independence affects COVID-19 vulnerability, but this does not apply the other way around. Moreover, this study has also proven that COVID-19 pandemic vulnerability levels have socio-economic spillover effects on neighbouring areas in Indonesia.
- Topic:
- Economics, International Cooperation, Pandemic, COVID-19, Socioeconomics, and Economic Integration
- Political Geography:
- Indonesia and Asia
19. Land Tenure Security, Credit Access and Agricultural Productivity in Cameroon
- Author:
- Tchinda Kamdem Eric Joel and Kamdem Cyrille Bergaly
- Publication Date:
- 01-2020
- Content Type:
- Research Paper
- Institution:
- African Economic Research Consortium (AERC)
- Abstract:
- Cameroonian farmers face two tenure systems: a modern regime and a customary regime. These two regimes are perpetually confronting each other, putting farmers in a total uncertainty as to the regime to adopt to ensure the sustainability of their ventures. This study aims to assess the influence of land tenure security on agricultural productivity through credit access. To achieve this goal, a two-stage sampling technique was applied to data from the third Cameroon Household Survey (ECAM 3). The number of farmers selected for the analysis was 602. These data were analysed using descriptive and three-step recursive regression models. The results of the analysis reveal that land tenure security improves agricultural productivity through the credit access it allows. A proof of the robustness of this result has been provided through discussion of the effects of land tenure security in different agro-ecological zones and through a distinction between cash crops and food crops. The overall results confirm that land tenure security positively and significantly influences agricultural productivity. The regression has also shown that the size of the farm defined in one way or another, the perception of farmers on their level of land tenure security and therefore indicates the intensity with which land tenure security influences agricultural productivity. The recorded productivity differential indicates that smallholder farmers, because they keep small farms, feel safer and produce more than those who keep medium-sized farms. The results also show that land tenure security significantly improves the value of production per hectare of food products that are globally imported into Cameroon. Therefore, we recommend that the public authorities promote land tenure security by reinforcing the unassailable and irrevocable nature of land title, but also by easing the conditions of access to it.
- Topic:
- Agriculture, Development, Economics, International Political Economy, Economic structure, and Economic Policy
- Political Geography:
- Africa and Cameroon
20. Political Instability, FDI and Economic Growth in Sub-Saharan African Countries: Evidence from Modelling Dynamic Simultaneous Equations
- Author:
- Lewis Landry Gakpa
- Publication Date:
- 01-2020
- Content Type:
- Research Paper
- Institution:
- African Economic Research Consortium (AERC)
- Abstract:
- The aim of this study is to examine the consequences of interaction between political instability and foreign direct investment (FDI) on economic growth of 31 countries in Sub-Saharan Africa in order to analyse one of the channels through which political instability affects economic growth. To achieve this objective, the study relies on a dynamic panel procedure and the Three Stage Least Squares Method to estimate a model of simultaneous equations over the period 1984-2015. The empirical results indicate that political instability affects economic growth directly and indirectly through its impact on foreign direct investment. We also highlight the simultaneous character of the relationship between political instability and the level of economic development in Sub-Saharan African countries. The results of the study then corroborate the idea that political instability hinders growth and thus calls for measures to improve the quality of political climate, which is one of the conditions necessary for a country’s economy to benefit from foreign direct investment.
- Topic:
- Economics, Foreign Direct Investment, Political stability, Economic Policy, and Macroeconomics
- Political Geography:
- Africa, South Africa, Angola, Namibia, and Botswana