East Asia’s De Facto Economic Integration

287 Pages·2006·1.557 MB·English

by  Daisuke Hiratsuka (eds.)

East Asia’s De Facto Economic Integration
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East Asia’s De Facto
Economic Integration
Edited by Daisuke Hiratsuka
© Institute of Developing Economies (IDE), JETRO 2006
Softcover reprint of the hardcover 1st edition 2006 978-0-230-00782-6
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First published 2006 by
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Library of Congress Cataloging-in-Publication Data
East Asia’s de facto economic integration / edited by Daisuke Hiratsuka.
p. cm.
Includes bibliographical references and index.
1. East Asia–Commerce. 2. East Asia–Economic integration. I. Hiratsuka,
Daisuke
HF3820.5.Z5.E376 2006
333.1(cid:2)5–dc22
2006044785
10 9 8 7 6 5 4 3 2 1
15 14 13 12 11 10 09 08 07 06
Contents
List of Figures viii
List of Tables x
Foreword xiii
Acknowledgements xv
Contributors xvii
Introduction: East Asia’s De Facto Economic Integration 1
Michel Fouquin, DaisukeHiratsuka and Fukunari Kimura
1 The Development of Fragmentation in East Asia and its 16
Implications for FTAs
Fukunari Kimura
1 De facto integration in East Asia 16
2 The mechanics of fragmentation in East Asia 18
3 Evolving patterns of industrial location and international 21
trade
4 Policy background and the implication for regional 24
integration
5 Conclusion 28
2 Intra-Industry Trade and Economic Integration 32
Pierre Ecochard, Lionel Fontagné, Guillaume Gaulier and Soledad
Zignago
1 Introduction 32
2 Measurement of intra-industry trade 34
3 Empirics of intra-industry trade 40
4 Determinants of intra-industry trade 55
5 Estimated model 58
6 Estimation results 61
7 Concluding remarks 66
3 Production Networks and Spatial Linkages in East Asia 80
Ikuo Kuroiwa
1 Introduction 80
2 Trade in East Asia 81
v
vi Contents
3 Spatial linkages in East Asia 88
4 Conclusion 98
4 Catching Up of Manufacturing Cum De Facto Economic 107
Integration in East Asia
Daisuke Hiratsuka
1 Introduction 107
2 Development stages of the “catching up” process 109
3 The inter-industry catching up cycle 111
4 Intra-industry catching up cycle 121
5 Development of intra-regional trade 125
6 Summary and conclusion 132
5 China’s Specialization in East Asian Production Sharing 135
Guillaume Gaulier, Françoise Lemoine and Deniz Ünal-Kesenci
1 Introduction 135
2 International production sharing in East Asia 137
3 China in the international division of labor in East Asia 144
4 Vertical specialization, high-tech trade and regional 154
integration
5 The impact of China’s emergence on Asian trade 159
6 Conclusion 168
6 Vertical Intra-Regional Production Networks in East Asia: 181
a Case Study of the Hard Disc Drive Industry
Daisuke Hiratsuka
1 Introduction 181
2 Industrial clusters formed by core firms and suppliers 182
3 Concentration and dispersion of hard disc drive (HDD) 185
assembly in East Asia
4 Clusters of HDD suppliers 190
5 Vertical intra-regional production networks 194
6 Summary and conclusion 196
7 A Comparison of De Jure Economic Integration in East Asia: 200
Is East Asia Discriminating Against Itself?
Michael Freudenberg and Thierry Paulmier
1 Introduction 200
2 Methodology 201
3 Is East Asia discriminating against itself? 211
4 Which East Asian countries protect their domestic 213
markets most from East Asian neighbors?
Contents vii
5 What are the major motivations underlying the tariff 216
structure in East Asia?
6 Which countries are facing the highest levels of protection 222
in East Asia?
7 Are there asymmetries in the level of protection between 224
tariffs faced and applied?
8 Conclusion 227
8 Regionalization in East Asia: Simulations Using a CGE Model 245
MIRAGE
Michel Fouquin
1 Introduction 245
2 Barriers to trade 246
3 Regionalization simulation with MIRAGE 247
4 Regional impacts: trade creation is driving regionalization 249
in East Asia
5 Detailed results by country or by zone 250
6 Prospects of regionalization in East Asia: some tentative 255
wishful thinking
7 Summary and conclusions 257
Index 259
List of Figures
0.1 Intra-regional trade (%) 2
0.2 Trade share of East Asia with partner country 3
0.3 The East Asian community 6
1.1 Two dimensions of fragmentation 19
1.2 Total cost reduction with fragmentation 20
1.3 Machinery goods and machinery parts and components: 22
shares in total exports and imports in 1990–1994
1.4 Machinery goods and machinery parts and components: 23
shares in total exports and imports in 2000
2.1 Evolution of the shares of the three trade types by 39
integration zone, 1993–2002
2.2 Trade types for various countries, 2002 40
2.3 Evolution of the shares of trade types in Europe, 1993–2002 41
2.4 Evolution of the shares of the three trade types in NAFTA, 47
1993–2002
2.5 Trade types in East Asia, 2002 48
2.6 Evolution of the shares of trade types in East Asia, 51
1993–2002
2.7 Evolution of the shares of trade types in Mercosur, 51
1993–2002
2.8 Homoscedasticity plots for the share of OWT 60
3.1 Process of roundabout production 88
3.2 Clusters in the machinery industry 97
4.1 The ICC curve according to the catching up product cycle 111
4.2 Apparel 114
4.3 Footwear and leather articles 114
4.4 Personal computer and peripheral equipment 114
4.5 Office and communication apparatus 114
4.6 Home electrical appliances 114
4.7 Precision apparatus 114
4.8 Motorcycles 115
4.9 Commercial vehicles 115
4.10 Passenger cars 115
4.11 Machine tool 115
4.12 Industrial machinery 115
4.13 Yarn and fabric 115
viii
List of Figures ix
4.14 Synthetic fiber textile 116
4.15 Home electrical appliance parts 116
4.16 Electronic parts 116
4.17 Office and communication apparatus parts 116
4.18 Molds 116
4.19 Motorcycle parts 116
4.20 Automobile parts 117
4.21 Machine tool parts 117
4.22 Industrial machinery parts 117
4.23 Basic petrochemical products 117
4.24 Petrochemical products 117
4.25 Iron and steel 117
5.1 Breakdown of China’s trade by customs regimes, 146
1992–2003
5.2 Share of foreign affiliates firms (FA) in total China’s trade, 151
1992–2003
5.3 Share of East Asian countries in regional trade (% of total 162
East Asian trade)
5.4 US imports from East Asia, 1980–2002 (US$ thousands) 164
5.5 EU 15 imports from East Asia, 1980–2002 (US$ thousands) 165
5.6 The share of East Asia in total US trade deficit (% of 166
US total trade balance)
6.1 A hard disc drive cluster in the Philippines 193
6.2 Parts procurement of a hard disc drive assembler located 194
in Thailand
7.1 The relationship between trade specialization and tariffs 218
applied in East Asian trade: three typical cases
7.2 Tariffs applied and tariffs faced in intra-Asian trade: 225
all products, 2002
8.1 Trade creation versus trade diversion in manufacturing 250
products (US$ billion)
8.2 Impact on bilateral trade balances of manufacturing 252
products (US$ billion)
8.3 Regionalization’s impact on exports (US$ million) 252
8.4 Regionalization’s impact on imports (US$ thousands) 253
8.5 Regionalization’s impact on net exports (US$ million) 253
8.6 Regionalization’s impact on output (%) 254