Comments on Regional Integration in the Americas David Roland-Holst - - PowerPoint PPT Presentation

June, 2004

Comments on Regional Integration in the Americas

David Roland-Holst

UC Berkeley, Mills College, and RDRC

Seventh Annual GTAP Conference on Global Analysis June 18, 2004 World Bank

June, 2004 Roland-Holst

2

Contents

• Lessons from Experience (if not from theory)
• Looking Ahead

June, 2004 Roland-Holst

3

Regionalism vs. Globalism? A moot point

Regional agreements have grown exponentially Cumulative numbers of FTAs, 1958-2003

20 40 60 80 100 120 140 160 180 200 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003

June, 2004 Roland-Holst

4

Rules of thumb for Regionalism

The more inclusive, the better The more diverse, the better Stay on the path to globalism Capital account – gradualism Exchange rates – no consensus

June, 2004 Roland-Holst

5

Looking Ahead

Four emergent areas that deserve more emprical attention:

• 1. Where does LAC fit into the global activity

matrix?

• 2. Regime change: From export competition to

import competition

• 3. Making trade-based growth sustainable:

climbing the value-added ladder

June, 2004 Roland-Holst

6

Looking Ahead: Where does LAC fit in?

• Our forecasts indicate the emergence of a

systematic pattern of triangular trade between China, the Rest of East and Southeast Asia, and the Rest of the World

• This Trade Triangle reveals that China’s

growth offers significant growth leverage to many trading partners.

• Chinese absorption is already the primary

driver of regional growth. How far will this extend?

June, 2004 Roland-Holst

7

Trade Triangle 2000

June, 2004 Roland-Holst

8

Trade Triangle 2020

LAC?

June, 2004 Roland-Holst

9

FTAs involving East Asian and Latin American Countries

Signed or ratified Under negotiation AFTA (1992) China-ASEAN

Singapore-New Zealand (2001)

Japan-ASEAN Japan-Singapore (2002) Korea-ASEAN U.S.-Singapore (2003) Japan-Korea Korea-Chile (2004) Japan-Chile Japan-Mexico (2004) Korea-Mexico Korea-Singapore Singapore-Mexico Singapore-Chile, etc.

June, 2004 Roland-Holst

10

Looking Ahead 2: From export competition to competition for imports

A tectonic regime shift in Global Trade

China’s export position is now well established, but the pace of absorption is forcing it onto more intense competition for resources and other intermediate goods.

Resource seeking integration/partnerships Upstream FDI Value added shifting/transfer pricing

June, 2004 Roland-Holst

11

Looking Ahead 3: Making trade- based growth sustainable

Export success for LAC has been a mixed

blessing in the past

Follow Asia’s example and make the

transition from resource booms to human- capital based development