Trade liberalisation
The Asian “noodle bowl”: is it serious for business?
How to mitigate the negative effects of Asian overlapped FTAs in the future?
Authors:
M. Kawai; G. Wignaraja
Publisher:
Asian Development Bank Institute , 2009
A lively debate is taking place over the impact of free trade agreements (FTAs) on East Asia's business. This paper seeks to address the critical question of whether the Asian noodle bowl of multiple overlapping FTAs is harmful to business activity, particularly for small- and medium-sized enterprises (SMEs).
The paper suggests that the Asian noodle bowl does not seem to have severely harmed the region’s business activity to date. However, as more currently under negotiation FTAs take effect and the complexity of the Asian noodle bowl increases, the business impact is likely to intensify.
The main findings of the paper are as follows:
- East Asian firms report more benefits than costs from major FTAs in effect
- a significant demand remains for more support for SMEs to export through FTAs in East Asian countries
- there is a need for a comprehensive set of policies to mitigate the negative effects of the Asian noodle bowl in the future
- in addition, further supportive policies are also needed, including encouraging rationalisation of rules of origin, upgrading origin administration, increased awareness of FTA provisions. Moreover, there are needs for improving business participation in FTA consultations, and improving institutional support systems for SMEs
- increased resources and closer cooperation between government agencies and business associations are also necessary features of policy implementation
