Asia-Pacific Trade and Investment Review, Vol. 1 No. 2 (November 2005)

120 Pages·2006·0.65 MB·English

by  Economic and Social Commission for Asia and the Pacific

ESCAP is the regional development arm of the United Nations and serves as the
main economic and social development centre for the United Nations in Asia
and the Pacific. Its mandate is to foster cooperation between its 53 members and
9 associate members. ESCAP provides the strategic link between global and
country-level programmes and issues. It supports Governments of the region
in consolidating regional positions and advocates regional approaches to
meeting the region’s unique socio-economic challenges in a globalizing world.
The ESCAP office is located in Bangkok, Thailand. Please visit our website at
www.unescap.org for further information.
The shaded areas of the map are ESCAP Members and Associate members.
ASIA-PACIFIC
TRADE AND INVESTMENT
REVIEW
Vol. 1, No. 2
United Nations
E S C A P
New York, 2005 ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC
i
ASIA-PACIFIC TRADE AND INVESTMENT REVIEW
Vol. 1, No. 2
United Nations publication
Sales No. E.05.II.F.33
Copyright  United Nations 2005
All rights reserved
Manufactured in Thailand
ISBN: 92-1-120446-1
ISSN: 1815-8897
ST/ESCAP/2383
The designations used and the presentation of the material in this publication do not imply
the expression of any opinion whatsoever on the part of the Secretariat of the United
Nations concerning the legal status of any country, territory, city or area, or of its
authorities, or concerning the delimitation of its frontiers or boundaries.
The views expressed in this publication are those of the authors and do not necessarily
reflect the views of the United Nations.
Mention of firm names and commercial products does not imply the endorsement of the
United Nations.
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AIMS AND SCOPE
The Asia-Pacific Trade and Investment Review is a biannual, peer-reviewed
journal for the dissemination of timely information and research analysis on the new,
emerging issues of trade, investment and enterprise development in Asia and the
Pacific. Primarily aimed at government policymakers, researchers and representatives
of the private sector, the Review imparts information on the latest trends in trade and
investment policy issues facing the region. The Review emphasizes implications for
policy relevance and operational research rather than academic research on theoretical
and methodological issues. Articles will be drawn from research work conducted by
outside researchers as well as the staff of the Trade and Investment Division of
ESCAP and its consultants.
ADVISORY BOARD MEMBERS
Mohamed Ariff
Malaysian Institute of Economic Research
Kuala Lumpur, Malaysia
Sanjaya Lall
Oxford University
Oxford, United Kingdom
Razeen Sally
London School of Economics
London, United Kingdom
Karl P. Sauvant
Formerly with UNCTAD, Geneva, Switzerland
Rajah Rasiah
Asia-Europe Institute
University of Malaysia, Kuala Lumpur, Malaysia
John S. Wilson
The World Bank
Washington, D.C., United States of America
Patrick Low
World Trade Organization
Geneva, Switzerland
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EDITORS
Chief Editor
Xuan Zengpei
Director, Trade and Investment Division
Managing Editors
Joong-Wan Cho
Investment and Enterprise Development Section
Trade and Investment Division
Marc Proksch
Trade Policy Section
Trade and Investment Division
Yann Duval
Trade Policy Section
Trade and Investment Division
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ASIA-PACIFIC TRADE AND INVESTMENT REVIEW
Vol. 1, No. 2, November 2005
CONTENTS
Page
Research Articles ........................................................................................................ 1
Tham Siew Yean Japan’s Response to Globalization:
Learning from Japanese Direct Investment .... 3
Indra Nath Mukherji The Bangkok Agreement: A Negative List
Approach to Trade Liberalization in
Asia and the Pacific ........................................ 27
Rashmi Banga Foreign Direct Investment in Services:
Implications for Developing Countries .......... 55
ESCAP secretariat Issues of Interest in WTO for
Countries with Economies in Transition:
Doha Development Agenda ........................... 73
Policy Briefs ................................................................................................................ 91
The Chinese Yuan Revaluation: Effects and Implications for Exchange
Rate Policy ..................................................................................................... 93
Liberalization of Market Access in GATS Mode 4 and its Importance for
Developing Countries .................................................................................... 101
Executive Summaries of Recent Studies in Trade and Investment Published
by the Secretariat ........................................................................................................ 109
The Role of Trade and Investment Policies in the Implementation of the
Monterrey Consensus: Regional Perspectives .............................................. 111
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Asia-Pacific Trade and Investment Review Vol. 1, No. 2, November 2005
Research Articles
1
Asia-Pacific Trade and Investment Review Vol. 1, No. 2, November 2005
Japan’s Response to Globalization:
Learning from Japanese
Direct Investment
Tham Siew Yean*
EXECUTIVE SUMMARY
he global production activities of transnational corporations (TNCs) that
Tare conducted via foreign direct investment (FDI) constitute one important
dimension of economic globalization. Therefore, the response of a country towards
TNC activity and FDI represents a key component of a country’s strategy towards
harnessing globalization for its national development. This article analyses the
approach of Malaysia and Japan towards the globalization of production and FDI.
Second, it will also assess whether the policies that have been utilized by Japan can be
used or adapted for Malaysia and other developing countries.
While both Malaysia and Japan tapped on the globalization of production and
investment flows for their development, the two countries differed significantly in
their response. Malaysia utilized investment inflows for acquiring the appropriate
technology that is necessary for its industrial development. In so doing, Malaysia
became part of the TNC global production networks, especially in the electrical and
electronics subsector. However, the lack of an indigenous technology base and the
utilization of foreign workers have limited its progress up the technology ladder and
its position in the TNC global production networks.
(continued on page 4)
* Deputy Director and Principal Fellow, Institute of Malaysian and International Studies, National University of
Malaysia, 43600 Bangi, Selangor, Malaysia, Tel.: (60 3) 89214171, Fax: (60 3) 89261022, E-mail: