A comparative analysis of regional integration potential in the Asia-Pacific Region

Abstract

Objective: The objective of the article is to verify whether the EU can be perceived as a benchmark for further integration of Regional Comprehensive Economic Partnership Participating Countries (RCEP PC) of the Asia-Pacific region.

Research Design & Methods: We adopted a quantitative research methodology. It employed cluster analysis through Ward’s minimum-variance method to analyze the Euclidean distances of eight GDP-based World Development Indicators and build two synthetic development measures: SMDRCEP and SMDEU. They were used to group countries according to their level of economic advancement. Standard deviation was used to measure the differences in the structure of GDP in both environments (σRCEP and σEU). The research sample was composed of all RCEP PC and European Union Member States (EU MS). The data sets came from the World Bank database.

Findings: The integrity level of RCEP PC is lower than that of EU MS; however, the differences are less significant than expected. Nevertheless, the possibility of RCEP reaching the next integration levels in the foreseeable future is limited.

Implications & Recommendations: As RCEP PC do not seem to be able to engage in further integration in the near future, RCEP PC policymakers and business entities should focus on keeping the agreement alive in its current form (FTA). We recommend analyzing whether integration in smaller and more homogeneous groups of countries is possible and desirable. Another factor worth further research is whether the inadequate size of the Chinese economy within the agreement has a pro- or anti-integrational influence on RCEP.

Contribution & Value Added: Our research provides an actual insight into the development possibilities of the ‘youngest’ regional integration agreement, the RCEP, based on the experiences related to the integration of the most advanced regional integration agreement, the EU.

Keywords

Regional Comprehensive Economic Partnership, European Union, regional integration, economic integration, economic integration indexes

Author Biography

Wojciech Ficek

Bachelor of International Economics in International Trade, alumnus and master’s program student at the Cracow University of Economics (Cracow, Poland). Scientific interests: regional integration, European unification process, financial economics, monetary integration, international trade relations, international economic and political relations. Applied research methods: synthetic measures of development, Ward’s method, standardized sum method, correlation analysis, linear arrangement.

Remigiusz Gawlik

Associate Professor at Cracow University of Economics (Cracow, Poland) and Extraordinary Associate Professor at the North-West University Business School (Potchefstroom, South Africa). Scientific interests: modelling and enhancing decision-making processes in management, international economic and political relations, social costs of global economic development, the economy of happiness and work-life balance, geopolitics. Applied research methods: Analytic Hierarchy Process, Analytic Network Process, Artificial Neural Networks, Fuzzy Sets. Certified Gestalt Counsellor and consultant in business communication with experience in international companies, NGO associate, consultant in European Union’s Framework Programmes, and guest lecturer at foreign Universities.

References

1. Balawi, A. (2021). Entrepreneurship ecosystem in the United Arab Emirates: An empirical comparison with Qatar and Saudi Arabia. International Entrepreneurship Review, 7(2), 55-66. https://doi.org/10. 15678/IER.2021.0702.05
2. Bhagwati, J.N. (1995). US trade policy: the infatuation with FTAs. Columbia University.
3. Browning, C. (2018). The construction and deconstruction of the EU’s neighbourhood. In T. Schumacher, A. Marchetti, & T. Demmelhuber (Eds.), The Routledge handbook on the European Neighbourhood Policy (pp. 119-129). Routledge.
4. Chaisse, J., & Pomfret, R. (2019). The RCEP and the Changing Landscape of World Trade. Law and Development Review, 12(1), 159-190. https://doi.org/10.1515/ldr-2018-0058
5. Chakraborty, D., Chaisse, J., & Xu, Q.I.A.N. (2019). Is it finally time for India’s free trade agreements? the ASEAN “Present” and the RCEP “Future”. Asian Journal of International Law, 9(2), 359-391. https://doi.org/7101.01/S3400009131524402
6. Chander, A., & Sunder, M. (2018). The Battle to Define Asia’s Intellectual Property Law: TPP to RCEP. UC Irvine Law Review, 8(3), 330-362.
7. Chang, S.M., Huang, Y.Y., Shang, K.C., & Chiang, W.T. (2020). Impacts of regional integration and maritime transport on trade: with special reference to RCEP. Maritime Business Review, 5(2), 143-158. https://doi. org/10.1108/MABR-03-2020-0013
8. Drysdale, P., & Garnaut, R. (1993). The Pacific: an application of a general theory of economic integration. In C.F. Bergsten & M. Noland (Eds.), Regional Institutional Arrangements (pp. 183-223). Institute for International Economics.
9. Dieter, H. (2021). RCEP-Countries create Asia-Pacific free trade zone: trade facilitation but no integrated bloc. SWP Comment 2021/C 03, 1-4. https://doi.org/10.18449/2021C03
10. Fallucchi, F., Luccasen, R.A., & Turocy, T.L. (2019). Identifying discrete behavioural types: a re-analysis of public goods game contributions by hierarchical clustering. Journal of Economic Science Association, 5, 238-254. https://doi.org/10. 1007/s40881-018-0060-7
11. Flach, L., Hildenbrand, H.M., & Teti, F. (2021). The Regional Comprehensive Economic Partnership Agreement and Its Expected Effects on World Trade. Intereconomics, 56(2), 92-98. https://doi.org/10.1007/s10272-021-0960-2
12. Foster, R. (2013). Tabula Imperii Europae: A cartographic approach to the current debate on the European Union as Empire. Geopolitics, 18(2), 371-402. https://doi.org/10.1080/14650045.2012.716466
13. Francois, J., & Elsig, M. (2021). Short overview of the Regional Comprehensive Economic Partnership (RCEP). European Parliament, Directorate General for External Policies of the Union, PE 653.625, 1-25. https://doi. org/10.2861/001684
14. Gaur, P. (2021). Regional Comprehensive Economic Partnership (RCEP): a Trade Agreement among Equals? Journal of Asia Pacific Studies, 6(3), 403-416.
15. Giannakitsidou, O., Tsagkanos, A., & Giannikos, I. (2016). Correlation of municipal solid waste production and treatment with socioeconomic indexes. International Journal of Environment and Waste Management, 18(4), 303-316.
16. Głodowska, A. (2017). Business Environment and Economic Growth in the European Union Countries: What Can be Explained for the Convergence?. Entrepreneurial Business and Economics Review, 5(4), 189-204. http://doi.org/10.15678/EBER.2017.050409
17. Götz, M., Jankowska, B., Matysek-Jędrych, A., & Mroczek-Dąbrowska, K. (2018). Governmental change and FDI inflow to Poland and Hungary in 2010-2016. Entrepreneurial Business and Economics Review, 6(1), 153-173. https://doi.org/10.15678/EBER.2018.060109
18. Huettinger, M., & Zirgulis, A. (2020). Controversies Regrading the TTIP Agreement in the Academic Literature. Review of Economics and Economic Methodology, 4(1), 79-103.
19. Ishikawa, K. (2021). The ASEAN Economic Community and ASEAN economic integration. Journal of Contemporary East Asia Studies, 10(1), 24-41. https://doi.org/10.1080/24761028.2021.1891702
20. Kamińska, T., & Zielenkiewicz, M. (2019). Changes in the similarity of business structure and demography after European Union accession. Research papers of Wrocław University of Economics, 63(6), 51-63. https://doi.org/10.15611/pn.2019.6.04
21. Kovacova, M., Kliestik, T., Valaskova, K., Durana, P., & Juhaszova, Z. (2019). Systematic review of variables applied in bankruptcy prediction models of Visegrad group countries. Oeconomia Copernicana, 10(4), 743-772. https://doi.org/10.24136/oc.2019.034
22. Kundera, J. (2019). The future of EU: Towards a two Speed Europe. European Research Studies Journal, 22(3), 261-281. https://doi.org/10.35808/ersj/1469
23. Kurihara, Y. (2017). Are RCEP and TPP Effective? American International Journal of Contemporary Research, 7(3), 102-108.
24. Maciejewski, M. (2017). The problems of the economic development of the European Union Member States. Scientific Journal of the University of Economics in Katowice, 319, 117-126.
25. Mazur, A., & Witkowska D. (2006) Application of the taxonomic measures to estimate of the real estate. Economics and Organization of Agri-Food Sector, 60, 251-258.
26. Mlambo, D.N. (2019). Unearthing the challenges and prospects of regional integration in Southern Africa. Journal of Public Affairs, 19(1), e1882, 1-7. https://doi.org/10.1002/pa.1882
27. Mlambo, V.H., & Mlambo, D.N. (2018). Challenges impeding regional integration in Southern Africa. Journal of Economics and Behavioral Studies, 10(2(J)), 250-261. https://doi.org/10.22610/jebs.v10i2(J).2234
28. Pacuk, M., Palmowski, T., & Tarkowski, M. (2018). The emergence of Baltic Europe: An overview of Polish research on regional integration. Quaestionaes Geographicae, 37(2), 47-60. https://doi.org/10.2478/quageo-2018-0013
29. Park, S.C. (2017). RCEP versus TPP with the Trump Administration in the USA and Implications for East Asian Economic Cooperation. Entrepreneurial Business and Economics Review, 5(4), 135-152. http://doi.org/10. 15678/EBER.2017.050406
30. Rahman, M.M., & Ara, L.A. (2015). TPP, TTIP, and RCEP: implications for South Asian economies. South Asia Economic Journal, 16(1), 38-43. https://doi.org/10.1177/1391561415575126
31. Savinsky, A.V. (2020). Economic Integration in ASEAN: trade-related aspects. In W. Szkutnik, A, Sączewska-Piotrowska, M. Hadaś-Dyduch, & J. Acedański (Eds.), Proceedings of the 14th International Scientific Conference Analysis of International Relations 2020 – Methods and Models of Regional Development, Summer Edition (pp. 178-188). Publishing House of the University of Economics in Katowice.
32. Shimizu, K. (2021). The ASEAN Economic Community and the RCEP in the world economy. Journal of Contemporary East Asia Studies, 10(1), 1-23. https://doi.org/10.1080/24761028.2021.1907881
33. Szarek, J., & Piecuch, J. (2018). The importance of startups for construction of innovative economies. International Entrepreneurship Review (previously published as Przedsiębiorczość Międzynarodowa), 4(2), 69-78. https://doi.org/10.15678/PM.2018.0402.05
34. Treib, O. (2020). Euroscepticism is here to stay: what cleavage theory can teach us about the 2019 European Parliament elections. Journal of European Public Policy, 28, 1-16. https://doi.org/10.1080/13501763.2020. 1737881
35. Ward, J.H. (1963). Hierarchical grouping to optimize an objective function. Journal of the American Statistical Association, 58. https://doi.org/10.1080/01621459.1963.10500845
36. World Bank (2021a). World Bank Metadata Glossary: <https://databank.worldbank.org/metadataglossary/all/ series>.
37. World Bank (2021b). World Bank Open Data database: <https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS>.
38. World Bank (2022). World Bank Open Data database: <https://data.worldbank.org/>.
39. Zhou, L., Pan, C., He, J., & Li, S. (2021). The Impact of RCEP on Chinese Regional Economy From Global Value Chains Perspective (tentative results). Law and Development Review (Working Paper). Retrieved on March 25, 2022 from https://www.gtap. agecon.purdue.edu/resources/download/10412.pdf.