國立中正大學經濟學系 國際經濟學博士 學位論文 Department of Economics National Chung Cheng University Ph. Dissertation ECONOMIC INTEGRATION AGREEMENTS AND INTERNATIONAL TRADE 指導教授: 陳偉智 博士 Advisor: Dr. Chen, Wei-Chih 研 究 生: 阮詩環 Advisee: Nguyen Thi Hoang Oanh 中華民國 108 年7 月 July, 2019 i ACKNOWLEDGEMENTS To approach this step of achievement, firstly, I would like to show my gratitude to my home-country‘s government (Vietnamese government) who offered me the chance to study abroad. This has been my dream since I was a child.
In addition, I would like to thank to the faculty members in the Economics of Department at the National Chung Cheng University for their approval so that I could have the admission to obtain the doctoral program here. When I first came to our department, everything was new to me, especially the courses were very difficult. To be honest, my English was not good, and I had no idea about Chinese. Undoubtedly, I got into a panic actually for wondering how to pass the courses and how to adapt to the new life.
Wang, Yu-Lin helped me not only choose the courses and to solve the academic problems but overcome my homesickness by accompanying me to somewhere or giving me some small gifts. From the bottom of my heart, no words can describe my appreciation towards her kindness. She also recommended Dr. Chen, Wei-Chih to be my advisor afterwards.
Chen when I was the third-semester student, and I became his advisee in the fourth semester. A long time before I came to Taiwan, I went to a fortune teller (), saying that in my life there would be a man who very much helped me, and now I know who he is. He always encourages me no matter what I do and what the results look like. I cannot also thank enough to Dr.
Chen, Ho-Chyuan, Dr. Tang, Meng-Chi, Dr. Liu, Wen-Hsien, and Dr. Weng, Yong-Ho for serving as committee members in my final defense.
I am grateful for the excellent courses offered by you. I remembered I once had a meeting with Dr. Tang in his office to discuss the final term paper, he gave each student 30 minutes, but it took me nearly an hour. My English was so bad that I could not understand what he said, so I consciously stayed longer to hear what he said ii again and again.
After nearly an hour, he advised me much, and I said ―Could you write down what you want me to do?‖ (). He smiled and wrote one sentence in a piece of paper, then I finished the course. Many thanks to Dr. Tang for your patience with the student like me! I am eternally grateful to Dr.
Wu, Jyh-Lin, Dr. Huang, Bwo-Nung, Dr. Ueng, Shyh-Fang, Dr. Chen, Fang-Yueh, Dr.
Chen, Wei-Cheng, Dr. Chu, Shiou-Yen, and Dr. Tseng, Fu-Min, who have not only helped me improve my academic skills but also been fruitful resources for me to learn from. And I am also very thankful that other Professors in our department and the officers – Ms.
Yuen and Ms. Huang help me with all enthusiasm and kindness in the whole time I have studied in Taiwan. It has been very fortunate of me to have friends from different countries: Taiwan, Vietnam, Thailand, Swaziland, Indonesia, etc. They are always beside me when I need their helps.
They have shared the happiness and sadness with me. Last but not least, I would like to send a special thank to my parents, my family, my husband, and my children. My husband, especially, has taken care of our kids and helped me all the time I have studied in Taiwan. If I do not have helps from him, I absolutely cannot finish my PhD degree.
One again, I would like to thank all the people who help me to achieve this goal, which is definitely not easy in my life. Thank you so much! iii PREFACE Over thirty years, the world has witnessed a big transformation of trade relationships, the preferential trade relationships truly began. The change in perception of the U. towards the preferential relationships, which was remarked by the U.
signing a free trade agreement with Israel in 1985, is one of the four forces dragging the booming in preferential relationships some years later, from only 15 RTAs in 1980 to 461 in 2018 (WTO). However, in the debate of the first contest of the campaign in 2016, Donald Trump – the President of the United States of America criticized the development strategies that the U.S has followed during the past 30 years and longed to revise them. After Donald Trump became the president, the world witnessed an extreme change in the USA‘s strategies which withdrew from the Trans-Pacific Partnerships (TPP). In the meantime, as the U.
presidential election (2016), the UK also conducted the staying or leaving the EU referendum, and it was determined to leave. How will the preferential relationships change along with this move of the U. and the UK? How is the liberalization of trade affected? And how are the trade flows affected? It is still early to assert the answers. This withdrawal or termination of preferential relationships is, however, not the first time in the history and development of preferential trade agreements.
We use those terminating relationships to provide a partial evaluation of those events on trade flows. The result shows that after the termination of a pair‘s economic integration agreement, their trade flows only increase in some years later and are driven by an extensive margin in the short run. Building trade relationships during EIA incorporation period does not help the pair maintain their long-term relationship. One of outstanding stylized facts in the EIAs is the difference in willingness to join the EIAs among countries, some of whom have signed many EIAs, but some others have not signed any.
Participating a lot of EIAs plays a role of a cushion for a iv country to sign an EIA with other countries more easily, especially in the case of small countries and large countries. However, this fact possibly generates trade diversion in trade growth and in the probability of products survival. This dissertation provides an evidence of the latter diversion effects of owning so many EIAs from the perspective of both exporters and importers. Obviously, preferential trade agreements have accelerated the trade liberalization process although only in regional scale, trade flows in over the world increase, and the opportunities of economic integration for all countries are offered.
Vietnam is a small country, and over two decades ago (1995) Vietnamese GDP per capita was only 581 (2010 US$), but she was ―willing to join‖ in the preferential agreements by signing the first free trade agreement with the Association of Southeast Asian Nations (ASEAN) countries. This is the milestone in Vietnamese integration process. After 20 years (2015), Vietnamese GDP per capita was 1651 (2010 US$), and the opening index was 170%. Especially, she has had the eight free trade agreements in force (by 2015), including six free trade agreements along with ASEAN and two bilateral trade agreements.
―Jumping on the battle‖ Vietnam hopes to accelerate her trade and economic growth. This dissertation also provides some evaluations on the trade effects of free trade agreements which Vietnam signed along with ASEAN and also by herself. Before detailing three matters above, the dissertation provides some contents relating to preferential trade agreements that are analyzed in the literature review. v TABLE OF CONTENTS CHAPTER 1.
1 OVERVIEWS OF TRADE AGREEMENTS. Trade Agreements: History and Trend of Developments. Definitions of Trade Agreements. History and Trend of Development.
Type of Trade Agreements. Number of members. The Level of Cooperation. The Stylized Facts of EIAs.
The Purposes of the EIA Formations. The Determinants that Affect the Formations of EIAs. The Economic Political Factors. Trend of Study .1 The Theories of EIA Effects .2 The Empirical Works.
Endogenous Problem in Analyzing the Effects of EIAs. Instrumental Variables/2SLS Approach with Cross-section Data. Fixed Effect and First Differencing with Panel Data. Extensive and Intensive Margins.
36 THE LASTING EFFECTS OF EIAs ON TRADE. Data and Variables. Empirical Model Specifications .1 Trade Creation of EIAs .2 The Lasting Effects of Past EIAs .3 The Short-Run and Long-Run Effects of Past EIAs. Robustness Checks and Extensions .1 Multilateral Resistanceand Trade Diversion .2 Cutoffs of the Short Run and the Long Run .3 Lasting Effects by the Type of Agreements .4 Lagged Explanatory Variables .5 Constructing Trade Values at the Product Level.
59 THE EFFECTS OF ASEAN EXPANSION ON. 59 ASEAN’S EXPORTS TO VIETNAM. Data and Variables. Empirical Models and Estimate Results.
80 DIVERSION EFFECT OF ECONOMIC INTEGRATION AGREEMENTS. Data and Method. 101 SUMMARY AND FUTURE RESEARCHES. 120 vii LIST OF ABBREVIATES ASEAN Association of Southeast Asian Nations APEC Asia-Pacific Economic Cooperation CGE Computable General Equilibrium CMs Custom markets CUs Custom Unions EC European Community EEC European Economic Community EIAs Economic Integration Agreements EU European Union EUs Economic Unions FDI Foreign Direct Investments FTAs Free trade agreements GCE General Computable Equilibrium GATT General Agreement on Tariffs and Trade GDP Gross domestic products GSP Generalized Systems of Preferences HK Hummels and Klenow HS The Harmonized Commodity Description and Coding System IPRs Intellectual Property Rights IVs Instrumental Variables LDCs Least developed countries MFN Most favored nation MLI Member Liberalization Index MR Multilateral Resistance NAFTA North American Free Trade Agreements OLS Ordinary Least Square OWPTA One-way Preferential Trade Agreements PTAs Preferential trade agreements RHS Right hand side RoOs Rules of Origin RTAs Regional trade agreements ROW Rest of the world STIC Standard International Trade Classification 2SLS Two-Stage Least Squares TBT Technical barriers to trade TC Trade creation TD Trade diversion TOT Terms of Trade TRIMs Trade-Related Investment Measures TRIPs Trade-Related Aspects of Intellectual Property Rights TWPTAs Two-way Preferential Trade Agreements UK United Kingdom UNCTAD United Nations Conference on Trade and Development VCCI Vietnam Chamber of Commerce and Industry VN Vietnam WTO World Trade Organization viii LIST OF FIGURES Fig.
Levels of cooperation in EIAs 1962 - 2000 Fig. RTAs in force and inactive, 1948-2018 Fig. The number of an exporter's EIA partners Fig. The number of an importer's EIA partners Fig.
RTAs currently in force (by year of entry into force), 1948 – 2018 Fig. Trade creation and trade diversion Fig. ASEAN exports to Vietnam ix LIST OF TABLES Table 1.1 The Frequency and Percent of Types of EIAs…………………….2 The 52 Provisions in Classification of EIAs in Horn et al.3 The number of EIA Relationships of per Exporter and Importer…….1 Definition of Extensive and Intensive Margins by Count Method ………32 Table 3.2 The Effect of Current EIAs on Trade………….3 The Effects of Current and Past EIAs on Trade………….4 The Long Run and Short Run Lasting Effects of Past EIAs…….5 The Gravity Mode Specification……….6 Different Cutoff Years between the Short Run and the Long Run ………54 Table 3.7 The Lasing Effects of EIAs by the Level of Integration……….8 Lag EIA Variables…….9 Trade Data at the Product Level…………………….1 The List of FTAs is used in current Chapter…………………….2 Standard International Trade Classification, Rev.3 The Effect of FTAs on Trade Flows to Vietnam…………………….4 The Export Effect of Bilateral and Multilateral Members to Vietnam….5 Total Registered Capitals of FDI by Main Counterparts (Accumulation Statistics – Mill-USD)…………………………………….6 The each FTA member‘s Export to Vietnam ……………….7 The Effect of ASEAN Expansion on ASEAN Export to Vietnam.8 The Different ―Export Behaviors‖ to Vietnam between the Less and More ASEAN Countries Investing in Vietnam……………….9 The Specialization of FTA-Members Exports to Vietnam on each Sector.10 The Export Effect of FTAs to Vietnam –Count Method…….11 The Effect of ASEAN Expansion on ASEAN Exports to Vietnam - Count Method…………………………………………………………………………….1 Distribution of Spell Lengths……………………….3 The Effect of EIA on the Hazard of Products Ceasing…….4 The ―Phase-time‖ Effect of EIA relationships on Duration……….5 The Interaction Effects of Products‘ Characteristics and Outsiders….6 The Hazard of Agricultural and Manufacturing Products Ceasing….