Trade and Investment in the Greater Mekong Subregion: Remaining Challenges and the Unfinished Policy Agenda
Menon, Jayant; Melendez, Anna Cassandra | May 2011
Abstract
The Greater Mekong Subregion (GMS) is one of the most successful stories of
economic transition and integration among developing countries. Strong rates of
economic growth since the early 1990s have been fueled by increased trade and foreign
direct investment (FDI) in the subregion. This economic progress has translated into
marked improvements in living standards and human development outcomes, and
dramatic reductions in poverty. Unilateral policy reforms and greater economic
cooperation through the GMS Program in particular have led to positive trade and
investment growth. More recently, membership in the World Trade Organization (WTO)
and participation in the Association of Southeast Asian Nations (ASEAN) Free Trade
Agreement (AFTA) and other preferential trading agreements have driven reforms.
Despite these achievements, the trade policy reform agenda remains incomplete. It is
important for the GMS members of AFTA to multilateralize their preferences in order to
avoid trade diversion and deflection, and remain open to global trade. This should also
be the objective of the various ASEAN+1 bilateral free trade agreements (FTAs).
Retaining a multiple-tier tariff system is unlikely to mitigate revenue loss, but could
unnecessarily burden an already stretched bureaucracy, or lead to more rent-seeking. In
order to reduce vulnerability to external shocks, diversification of both export
commodities and markets are being considered. Intra-sectoral diversification of export
commodities is likely to be more viable and less costly than inter-sectoral diversification.
It is unlikely, however, that any rebalancing of growth from foreign to domestic demand
would be required in the GMS countries in order to increase resilience to external shocks.
Citation
Menon, Jayant; Melendez, Anna Cassandra. 2011. Trade and Investment in the Greater Mekong Subregion: Remaining Challenges and the Unfinished Policy Agenda. © Asian Development Bank. http://hdl.handle.net/11540/2030. License: CC BY 3.0 IGO.Keywords
Trade Finance
Rural Finance
Regional Development Finance
Public Financial Management
Public Finance
International Finance
Intergovernmental Finance
Financial System
Financial Flows
Financial Assets
Finance And Trade
Trade Finance
Local Finance
International Monetary Relations
Local Finance
Banks
Capital Market
financial statistics
Foreign trade
Municipal government
Metropolitan government
International banks and banking
Capital movements
Central banks and banking
Bills of exchange
Swaps
Banks and banking
Stock exchanges
Market
Exchange
Balance of trade
Show allCollapse
Citable URI
http://hdl.handle.net/11540/2030Metadata
Show full item recordUsers also downloaded
-
The Status of East Asian Free Trade Agreements
Zhang, Yunling; Shen, Minghui (Asian Development Bank, 2011-05-15)Free trade agreements (FTAs) have become a prominent feature of the multilateral trading system and an important instrument of trade policy for members of the World Trade Organization (WTO). The proliferation of FTAs is the result of a number of factors, from the economic to the political. East Asia is with no exception involved in the process and witnessing the establishment of multilayered FTAs. ...Free trade agreements (FTAs) have become a prominent feature of the multilateral trading system and an important instrument of trade policy for members of the World Trade Organization (WTO). The proliferation of FTAs is the result of a number of factors, ... -
Supporting the Growth and Spread of International Production Networks in Asia: How Can Trade Policy Help?
Menon, Jayant (Asian Development Bank, 2013-05-01)Free trade agreements (FTAs) have been proliferating in Asia for more than a decade. International fragmentation of production and the resultant cross-border production networks have been growing for a much longer period. Although FTAs are not necessary for the formation of production networks, can they support their further growth or spread? Empirical studies of this issue have produced mixed ...Free trade agreements (FTAs) have been proliferating in Asia for more than a decade. International fragmentation of production and the resultant cross-border production networks have been growing for a much longer period. Although FTAs are not necessary for ... -
ASEAN's Free Trade Agreements with the People's Republic of China, Japan, and the Republic of Korea: A Qualitative and Quantitative Analysis
Estrada, Gemma; Park, Donghyun; Park, Innwon; Park, Soonchan (Asian Development Bank, 2011-03-01)Expanding trade with East Asia’s “Big Three” economic giants—the People’s Republic of China, Japan, and the Republic of Korea—offers a new potential source of growth for ASEAN. The central objective of this paper is to qualitatively and quantitatively assess the different permutations of ASEAN’s free trade agreements (FTAs) with the Big Three. The two types of analyses both suggest that an ASEAN+3 ...Expanding trade with East Asia’s “Big Three” economic giants—the People’s Republic of China, Japan, and the Republic of Korea—offers a new potential source of growth for ASEAN. The central objective of this paper is to qualitatively and quantitatively ...