Performance of the Asia-Pacific Trade Agreement: Estimating the Utilization Rate in Korea and China

다국어 초록 (Multilingual Abstract)

The Asia-Pacific Trade Agreement(APTA), which originated from the Bangkok Agreement, is the oldest preferential trade agreement in the Asia-Pacific region. APTA covers Southwest, Southeast and East Asia and includes Bangladesh, China, India, Korea, Lao PDR and Sri Lanka, comprising a combined population of more than 2 billion people. Based on differences in levels of development for each of the member countries, APTA pursues a gradual tariff reduction instead of an abrupt tariff elimination. In this regard, APTA has shown relatively slow progress. However, after concluding the Third Round Agreement in 2006 followed by the accession of China in 2001, APTA successfully promoted economic cooperation through the adoption of mutually beneficial trade liberalization measures such as relaxation of tariffs, standardization of procedures and formalities relating to mutual trade, adoption of common tariff nomenclature and harmonization of rules of origin. We summarize the development of APTA and examine the effectiveness of implementing the Third Round Agreement. The coverage ratio, utility ratio and utilization rates for Korea and China improved between the first and second years of implementation. Although the trade liberalization effects of APTA appear slow and gradual, such a gradual mechanism enables this unique group of countries to continue to expand their mutual trade and economic cooperation.

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