Prostranstvennaâ Èkonomika (Dec 2023)
The Sectoral Dimension of Trade Expansion in the Western Macrozone of the Asia-Pacific Region: The Role of Global Formats
Abstract
The purpose of this study was to assess the impact of countries participation in global trade formats on the turnover of commodity and industrial products in the Western macrozone of the Asia-Pacific Region (APR) in 1993–2021. It is shown that over the last three decades the Western macrozone of the APR, which includes the countries of East Asia, Oceania and Australia, has become the most dynamic economy in the world due to the reduction of restrictions in intra-regional trade. The estimation of border effects based on the gravity model confirmed the long-term total cost reduction for trade in commodity and industrial products in the Western macrozone of the APR. The estimates identified the crucial importance of global format mechanisms for trade expansion in the Western macrozone of the APR in the long run: by 113% for commodity products; by 101% for industrial products. The assessment of indirect trade effects revealed the key role of global formats in expanding trade in the Western macrozone of the APR by creating a common ‘benchmark’ for reducing trade barriers, including by extending such behavior to countries that have not acceded to the GATT and WTO. The discovered multiplication of direct and indirect trade effects of the GATT and WTO indicated the sufficiency of the mechanisms of global formats for the formation of a free market for commodities in the Western macrozone of the APR, which does not require the creation of free trade zones, in contrast to the market for industrial goods, which operates under conditions of monopolistic competition. The estimates obtained in the study complement the existing conclusions on the impact of integration formats on trade, indicating that the sectoral aspect of trade interactions is a key parameter for identifying rational motives explaining the use of specific integration instruments to expand trade within the Western macrozone of the APR. On the basis of the obtained assessments the motives of Russia’s long-term trade and economic positioning within the Western macrozone of the APR with reliance on the WTO mechanisms under the conditions of preserving the raw material model of the national economy are explained
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