ASIA PACIFIC FTA

"European Union, China and Free Trade Agreements in the Asia Pacific"

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 Obiettivo del progetto (Objective)

'The aim of this project is to provide an overview of developments in free trade agreements (FTAs) in the Asia Pacific, and to focus on how these interplay with the political economy strategies of diverse actors in the area. This will be achieved by compiling a database on FTAs in the region and correlating variables to establish policy trends, and by undertaking comparative studies of the FTA strategies in the area of China, as the key regional economic power, the EU, as the world’s largest market, and New Zealand, as small economy in the region very active in FTAs. Given the small economic gains of many FTAs involving small economies, or a large and a small economy, the project will focus on political reasons for FTAs and clarify the rationale for these, including the possibilities that FTAs may be a less scrutinized and resisted path to extend an elite liberalization agenda in the region; a way to reconcile divergent domestic interests by extending partial liberalization whilst retaining protection of key sectors (especially in the case of larger actors); that these may be utilized as a longer-term strategy to attract the bigger players and secure a more influential position in the future; or that they may result of particular perceptions and beliefs regarding the situation. The implications of this will enhance our understanding of FTAs as political strategic tools. The presence and actions and reactions of the larger players will enable conclusions to be drawn regarding soft and even unintended power, in the sense that players such as the EU and China could be affecting policies in the Asia Pacific region (as well as each others’) even before they actively engage in negotiations and specific strategies with third parties, thus providing a more nuanced view of the power capabilities of the EU and China in this part of the world as well as of the FTA phenomenon. Wider implications of the project include enhancing information on the utility of FTAs, better info'

Descrizione progetto (Article)

FTA numbers have grown exponentially in the last decades, particularly in the Asia-Pacific Basin, yet the exact economic and political effects of such agreements remain unclear.

Thus, the EU-funded project 'European Union, China and free-trade agreements in the Asia Pacific' (ASIA PACIFIC FTA) aimed to find out. The study investigated developments in FTAs in the Asia-Pacific. The focus was on comparing the effects of agreements with China on its large and small trade partners, including the EU and New Zealand. The 3-year project concluded early in 2014.

Work began with a literature review of respective trade policies. Additional data were compiled from sources, including government websites. The researchers conducted survey-based fieldwork in Australia, China and New Zealand, and held interviews in Brussels with European officials and other experts.

Results indicate an ingrained support for FTAs combined with anxiety about possibly missing out on the economic benefits. Different players have different goals. China is currently interested in rewarding political ties, reassuring its neighbours and guaranteeing the supply of materials, although more recent agreements start to reveal a shift to a more comprehensive approach to FTAs. The EU and the United States favour extending their preferred model of trade and economic governance, especially regarding compliance with World Trade Organization (WTO) principles and extension of liberalisation beyond WTO modalities. The EU's negotiations with Asian partners illustrate resistance to such models.

For smaller economies, such as New Zealand, FTAs represent an opportunity for economic expansion beyond their limited market. More significantly, the agreements and relationships developed during negotiations, as in the case of the FTA with China, provide high-level access to Chinese government officials and diplomatic influence, which would be impossible otherwise. Small countries pioneered FTAs with China, which both opened the door for access by larger players and provided those players with key information.

The project's findings resulted in 12 published articles, 4 book chapters, and over 20 presentations and seminars. A book about the outcomes will be published in 2015.

ASIA PACIFIC FTA examined the complexities of FTAs in the Asia-Pacific, contributing a better understanding, including the ideological forces often at work. The outcomes showed the motivations of Asian policymakers, which can benefit their European counterparts in negotiations.