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| ANALYSIS |
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Vision
Impaired
by Chairman, Alan Oxley |
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China
now has global economic muscle. It is sustaining growth in the
global economy and its cheap goods are holding inflation at
bay. So when China suggests rearranging current agreements or
formalizing new ones, people go along, even if it may not be
in every party's economic self-interest.
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China is pursuing the creation of an East Asian economic community,
a free trade area, covering China, Japan, South Korea and the
ASEAN countries. This idea, along with a formal summit schedule
to make it so, was agreed to when the Leaders of ASEAN met at
their Summit in Vientiane, Laos last November.
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Why not create a single market in East Asia? These economies
are big traders, accounting for just over a quarter of world
trade. They also trade a lot with each other. But there is more
to creating a free trade area than simply signing an agreement
and saying it is so.
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First, the goal of free trade areas is to create economic growth,
not just expand trade. It is possible to increase trade and
weaken an economy at the same time. While Japan expanded trade
over the last twenty years, the core of its economy stalled,
resulting in a recession that lasted for a decade.
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Second, a free trade area is only successful if all goods are
traded freely and investors are free to put their money where
they will get the best return. These are the conditions essential
for creating efficiency and growth and which do not yet exist
in many East Asian countries. When governments decide who should
trade and invest, that's a sure prescription for limiting growth.
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Governments are often a major obstacle in creating true free
trade areas. When governments negotiate free trade areas, more
often than not, they set them up to serve political rather than
economic ends. This is quite understandable. A free trade area
or agreement is a highly effective, non-military way of building
closer relations.
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The problem is that politically-motivated free trade areas carry
economic risk. The process of economic integration in Europe
demonstrates this perfectly. Western Europe has created a single,
open market based on a Customs Union which is similar to a free
trade area. In a customs union, members remove trade barriers
among them and adopt common tariffs with third parties.
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But the real aim of the European Customs Union was to promote
political union. The economic community was simply a stepping
stone, not the means to an end. The result is that Europe has
never fully formed its free trade area. Agriculture and services,
the biggest sectors in each European economy, are still heavily
regulated and are not being properly integrated into the free
market. Consequently, Europe's growth has been consistently
lower than the US, Canada, Australia and New Zealand.
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So the key question is what sort of Asian economic community
does China want: a market which aims to increase efficiency,
trade and investment, or does it have the European model --
a stepping stone to a political union -- in mind?
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Officials in Beijing might regard a political union built around
its leadership a natural result of an economic union, but those
in Tokyo, Hanoi, and Jakarta (to name a few) would not.
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If the goal is an economic community forged to produce economic
efficiency and freedom, which Asian economy will be its champion?
Large economies usually set the standards. In East Asia, the
biggest economies are Japan and China.
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But at this time, China cannot credibly set the standards for
a free market community. Its transition to the free market is
not yet complete -- property rights are not yet fully secure
and the judiciary is not yet independent; not to mention every
large business is required to have a cell of the Chinese Communist
Party.
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While Japan is the leading market economy in East Asia, it still
shows signs of a mercantilist legacy. The Government expects
and is expected to direct the economy. The Ministry of Finance
does not hesitate to enter the stock market to boost share prices
when needed.
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If other nations of East Asia agree to form an economic community
with China and Japan as the standard setters, they are condemning
themselves to a sub-par economic future.
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Is this the vision for the future for East Asia? I sure hope
not. |
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| This
article was first published on http://www.techcentralstation.com/ |
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| ACTIVITIES |
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Centre
Strengthens International Free Trade Ties with Cato Institute
by Tim Wilson |
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During
his recent visit around Australia, Head of Trade Policy Studies
at International Free Market think-tank, the
Cato Institute, Daniel Griswold, visited and met with staff
at the Australian APEC Study Centre. Mr Griswold was on a week
long tour of Australian capital cities delivering presentations
on the benefits and opportunities provided by free trade. The
tour was sponsored by the US Department of State as part of
a series of lectures to promote understanding of American perspectives
on issues. While the tour was sponsored by the US Department
of State, the policy positions of Mr Griswold were not.
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From
left to right: Daniel Griswold, Ray Evans, Alan Oxley, Tim
Wilson and Steven MacMillan (Photo courtesy of Daniel Griswold) |
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| During
his tour Mr Griswold met with Chair of the Australian APEC Study
Centre, Alan Oxley and Projects Manager, Tim Wilson. This meeting
also included HR Nicholls Society Secretary, Ray Evans, and
ITS Global Consultant, Steven MacMillan. Discussions were held
on free trade and the opportunities from the AUSFTA and China's
economic growth. Expected outcomes from the Doha Development
Agenda at the World Trade Organisation (WTO) were also discussed. |
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Profile:
Centre Intern, Amanda Andonovski
by Judi O'Gorman |
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| The
Australian APEC Study Centre periodically takes on interns from
Australian and International Universities. The Centre's current
intern is Amanda Andonovski. Judi O'Gorman sat down with Amanda
and quizzed her on her internship experience. |
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| Question
1: What are you studying at University?
I
am studying a Bachelor of Arts/Bachelor of Commerce at Deakin
University in Geelong, majoring in economics, international
relations and Indonesian language. I will finish my degree
at the end of 2005.
Question
2: What project are you currently working on?
At
the moment I am updating information on ‘The Globalisation
Guide’ website. This project is being undertaken as
part of my internship with the Australian APEC Study Centre.
The Globalisation Guide is an introductory resource to the
globalisation phenomenon, highlighting both pro- and anti-globalisation
perspectives on a range of issues such as trade, culture and
communications technology. In particular, I am researching
trade and inequality statistics, and identifying the perspectives
of key individuals and organisations involved in the debate
on globalisation.
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Centre
Intern, Amanda Andonovski |
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Question
3: What excites you about international trade and
investment?
The
fact that international trade and investment has the potential
to lift millions of people out of poverty worldwide, and improve
our way of life, as reflected by Australia’s economic
development since its opening to the global economy since
the 1980s.
Question
4: What have you learnt about international trade
and investment since starting with the Centre?
The
key things I have learnt during my time at the Centre are
that international trade and investment are highly political
issues, and that many of the key players involved are not
what they seem.
Question
5: Where do you hope your course and this internship
will lead you?
Hopefully
to an internationally-focused career with a non-governmental,
or inter-governmental organisation. |
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| PUBLICATIONS
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New
Textbook - International Trade and Investment: An Asia-Pacific
Perspective 2E (by John Gionea)
by Tim Wilson |
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With
a string of bilateral trade agreements and activities in the
WTO, International Trade and Investment has never been so regularly
covered in media outlets. Despite this, quality consolidated
resources that can accurately explain the drivers of international
trade and investment with both the theoretical approach and
evidence to support a greater understanding of trade and investment
is rare. Dr John Gionea's revised version of "International
Trade and Investment: An Asia Pacific Perspective 2E",
has succeeded in covering this complex subject area while making
it topical and relevant.
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Across
16 chapters, Dr Gionea has successfully covered many of the
most contemporary issues facing international trade and investment,
including global industry profiles and the challenges they
face. Gionea has recognised the speed that the debate on international
trade and investment is moving by bringing together a compendium
showing insight and understanding of the complexity of debate
and relevant, current examples of trade and investment flows.
This revised edition includes a whole new Chapter (Chapter
16) on Global Industry Profiles (Grain, Automotive and Telecommunications)
and new case studies, including:
- The Australian 'Bionic Ear';
- FDI in China: Matsushita Starts Speaking Chinese;
- The Renminbi: To 'Re' or not to 'Re';
- Importing from the Aliens, or the missing world surplus;
- East Asia - From the financial crisis to regional monetary
union;
- Foster's, From Beer Headaches to Wine Hangover;
- Howe Leather; and
- Developing Advertising in Developing Asia.
Each
chapter includes theoretical issues, with supporting revised
real-world evidence and data to identify and establish a reader's
understanding of the issues that exist in trade and investment,
as well as Case References (including appropriate internet
resources) and discussion questions. This edition also provides
a summary of each chapter and comprehensive glossary of key
terms. The book is a useful resource for courses at an undergraduate
and graduate level.
Dr John Gionea has drawn on his wealth of experience over
20 years working in academia, business and for government.
John currently works for RMIT University in Melbourne, Australia.
Dr Gionea completed his PhD at RMIT's Graduate School of Administration
on the topic of International Trade.
This edition follows the first edition printed in 2002 and
has been published by McGraw Hill Australia. |
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| FORTHCOMING
EVENTS |
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2005
Monash University APEC Lecture with Former Director-General
of the WTO, Michael Moore
by Tim Wilson |
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| In
2005 the Monash University APEC Lecture, organised by the Australian
APEC Study Centre, will be given by former Prime Minister of
New Zealand and Director General of the World Trade Organisation
(WTO), the Hon Michael Moore. The lecture will be held two weeks
before the WTO Ministerial Meeting in Hong Kong. This WTO meeting
will attract significant attention as it will be vital to the
conclusion or reshaping of the Doha Development Agenda (DDA)
negotiations. This will be the focus of Mr Moore’s speech.
The lecture
will be held from 12:30pm – 14:00pm, Wednesday, 30th
of November 2005 over a two course lunch. The Lecture will
be held at the Sofitel, Melbourne.
The Monash
University APEC Lecture is part of the Australian APEC Study
Centre’s Annual calendar of events and traditionally
draws senior Australian and International business and government
representatives. The aim of the lecture is to increase awareness
of current and topical issues of importance to the international
community.
Past
lectures have been delivered by Hon Kim Beazley MP, Leader
of the Opposition in the Australian House of Representatives,
Warren Maruyama, a Washington based trade law counsellor,
Mr Anand, former Prime Minister of Thailand and Dr Ken Henry,
Secretary of the Australian Treasury.
Click here
for an invitation or here
for an application form. |
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Asian
Bankers Association 22nd Annual General Meeting and Symposium
by Tim Wilson |
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The
Asian Bankers Association will be hosting its 22nd Annual General
Meeting on the theme of "Globalisation of Markets: Local
vs Global" in Melbourne, Australia from the 17th - 19th
of October 2005. The Annual General Meeting will be hosted at
Crown Casino.
In addition to Annual General Meeting formalities, Seminars
will be held on the second day of the Annual General Meeting
on the themes of: "The Markets of China and Vietnam",
"The Markets of Indonesia and India", "Global
Players going local" and "The Role of Global Specialists
in Asia" under the broader theme of "Understanding
Key Banking Issues in Key Markets".
The program and registration form for the Annual General Meeting
can be downloaded here.
On the final day of the AGM a Symposium jointly organised by
the APEC Business Advisory Council (ABAC), the Asian Bankers
Association (ABA) and the Pacific Economic Cooperation Council
(PECC) on "Good Corporate Governance and Transparency in
APEC's Financial Institutions".
Speakers involve Australian and International Speakers. The
program can be downloaded here.
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