Postigo, Antonio
(2013)
Production networks and regionalism in East Asia: firms and
states in the bilateral free trade agreements of Thailand and Malaysia.
PhD thesis, London School of Economics and Political Science.
Abstract
Investment and trade flows across East Asia during the last three decades have fostered the
development of production networks and economic integration. However, only since the turn of
the century, have East Asian countries begun to institutionalize such integration through free trade
agreements (FTAs). With the exception of Japan, the literature portrays East Asian FTAs as driven
by political elites on primarily foreign policy motivations and with marginal participation of
businesses in their formulation and utilization. Most of these narratives have, however, overlooked
endogenous sources of trade preferences, shortcoming that this Thesis attempted to correct by
analyzing how FTAs fit within the strategies of states and firms. The project investigated the
mutual interaction between evolving trends within East Asian production networks and states’ and
firms’ preferences on FTA liberalization using as case studies the bilateral FTAs negotiated by
Thailand and Malaysia within the context of key production networks, particularly the automotive
industry. Research involved extensive process-tracing through semi-structured interviews and
trade data analyses. The main findings of this dissertation were: 1) Compared to multilateral
liberalization, greater technical complexity and easier assessment of impacts in bilateral FTA
negotiations resulted in more intense government-business consultations and corporate lobbying.
Successive FTA negotiations strengthened the technical capacities of bureaucrats and firms and
prompted the emergence of new institutional structures for intermediation and coordination among
all actors; 2) Sectors that had successfully lobbied ex-ante for FTA liberalization and/or benefited
from unilateral liberalization schemes have made extensive utilization of FTAs; 3) Governments
and firms in both countries sought and extracted selective rents in FTAs to improve their relative
position not only with respect to states and firms outside the bloc but also inside, and; 4) The
interplay between overlapping FTA areas and the investment sunk in them shaped governments’
and firms’ positions on further FTA liberalization.
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