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Regional Trade Integration and Conflict Resolution Edited by Shaheen Rafi Khan Regional Trade Integration and Conflict Resolution This volume addresses the growth of regional trade agreements (RTAs), which have mushroomed since the 1990s, and considers their potential as a tool for reducing inter- and intra-state conflict. Exploring the links between trade, conflict and peace in different and vary- ing contexts, this book maps the extant RTAs in the region, analyses the factors that hinder or promote regional trade integration and considers their economic and political impacts. Presenting a series of case studies in four regions: South America; the southern African region; South Asia; and South East Asia, the authors consider three key questions: • What is the significance of the recent and rapid development of RTAs for peace building both within and between countries? • To what extent do RTAs engender inter- and intra-state conflict? • To what extent are trade and RTAs hostage to conflict and is regional political stability a precondition for economic integration? Regional Trade Integration and Conflict Resolution will be of interest to students and scholars of trade, international relations and conflict studies. It will also be of interest to policy makers and non-governmental organisations (NGOs). Shaheen Rafi Khan is Research Fellow at the Sustainable Development Policy Institute (SDPI), Islamabad, Pakistan. Routledge Advances in International Political Economy 1 The Future of the Nation-State 8 Foreign Direct Investment, Essays on cultural pluralism and Democracy and Development political integration Assessing contours, correlates and Edited by Sverker Gustavsson and concomitants of globalization Leif Lewin Indra de Soysa Co-publication with Nerenius and Santérus Publisher 9 Rethinking International AB, Sweden Organization Deregulation and global goverance 2 Classical Liberalism and Barbara Emadi-Coffin International Economic Order Studies in theory and intellectual 10 Technology, Governance and Political history Conflict in International Industries Razeen Sally Tony Porter 3 Coping with Globalization 11 America’s Trade Policy towards Japan Jeffrey Hart and Aseem Prakash Demanding results John Kunkel 4 Responding to Globalization Jeffrey Hart and Aseem Prakash 12 Chinese Capitalism in a Global Era Towards hybrid capitalism 5 Japanese Capitalism in Crisis Henry Wai-chung Yeung A regulationist interpretation Edited by Robert Boyer and 13 The World Bank and Africa Toshio Yamada The construction of governance states 6 Globalization and Social Change Graham Harrison Edited by Johannes Dragsbaek Schmidt and Jacques Hersh 14 Welfare, Right and the State A framework for thinking 7 Multilateralism and the World Trade David P. Levine Organisation The architecture and extension of 15 Regional Trade Integration and international trade recognition Conflict Resolution Rorden Wilkinson Edited by Shaheen Rafi Khan Regional Trade Integration and Conflict Resolution Edited by Shaheen Rafi Khan International Development Research Centre Ottawa • Cairo • Dakar • Montevideo • Nairobi • New Delhi • Singapore First published 2009 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Avenue, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group, an informa business Published in association with the International Development Research Centre PO Box 8500, Ottawa, ON K1G 3H9, Canada www.idrc.ca [email protected] ISBN: 978–1–55250–414–7 (ebook) © 2009 International Development Research Centre Typeset in Times New Roman by RefineCatch Limited, Bungay, Suffolk Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Regional trade integration and conflict resolution / edited by Shaheen Rafi Khan. p. cm.—(Routledge advances in international political economy ; 14) Trade blocs—Developing countries. 2. Developing countries— Commercial treaties. 3. Developing countries—Foreign economic relations. 4. Peace-building—Developing countries. 5. Regionalism—Developing countries. I. Khan, Shaheen Rafi. HF1418.7.R443 2008 382′.911724—dc22 2008018392 ISBN 10: 0–415–47759–X (pbk) ISBN 10: 0–203–88980–0 (ebk) ISBN 13: 978–0–415–47759–8 (pbk) ISBN 13: 978–0–203–88980–0 (ebk) Contents List of figures vii List of tables viii Notes on contributors x Foreword xi Preface xv Acknowledgements xvii List of acronyms xviii 1 Introduction 1 OLI BROWN, SHAHEEN RAFI KHAN AND FAISAL HAQ SHAHEEN 2 Regional integration, trade and conflicts in Latin America 15 ALEJANDRA RUIZ-DANA, PETER GOLDSCHAGG, EDMUNDO CLARO AND HERNÁN BLANCO 3 Regional integration, trade and conflict in southern Africa 45 MZUKISI QOBO 4 Regional trade agreements in South Asia: trade and conflict linkages 69 SHAHEEN RAFI KHAN, MOEED YUSUF, FAISAL HAQ SHAHEEN AND AZKA TANVEER 5 Regional trade agreements and conflict: the case of Southeast Asia 102 HANK LIM 6 Managing conflict through trade: the case of Pakistan and India 130 SHAHEEN RAFI KHAN, FAISAL HAQ SHAHEEN AND MOEED YUSUF vi Contents 7 Outlines of intra-state conflict in Zimbabwe and regional challenges 165 MZUKISI QOBO 8 Peru and Ecuador: a case study of Latin American integration and conflict 181 ALEJANDRA RUIZ-DANA 9 Trading across the Straits: will a free trade agreement between China and Taiwan promote peace? 207 HANK LIM 10 Conclusion: the role of regional trade integration in conflict prevention 231 OLI BROWN, MZUKISI QOBO AND ALEJANDRA RUIZ-DANA Index 252 Figures 2.1 Map of South America 17 2.2 Trade agreements signed and under negotiations in the Americas 23 2.3 Development of tariffs in Latin America and the Caribbean (LAC) 24 4.1 Trade and conflict dynamics 70 4.2 Political stability 72 4.3 Comparison of South Asian tariffs with other regional trading blocs 89 5.1 East Asia’s export shares using input–output table calculations, 2003 115 6.1 The peace dividend 153 6.2 Pakistan’s defence, education and health expenditures 155 6.3 Defence expenditures as a percentage of GDP (Pakistan and India) 155 8.1 Peru–Ecuador: area of boundary dispute 184 8.2 Defence spending 189 8.3 Bilateral trade trends 194 8.4 Regional trade 197 8.5 Global trade 197 Tables 1.1 Acronyms for selected prominent RTAs 2 1.2 Good governance conditionality in south–south RTAs 8 2.1 LAC export structure 25 2.2 Intra-regional trade per sub-region 25 3.1 Bilateral complementarity indices in SADC 53 3.2 Overlapping membership 58 4.1 Chronology of major conflicts in South Asia 78 4.2 Trade and conflict language in RTAs 83 4.3 Intra-regional export shares: a comparison across southern RTAs 87 4.4 SAARC intra-regional trade 88 4.5 India’s informal trade with South Asian countries 88 4.6 Non-tariff measures–coverage ratio of South Asian countries 88 4.7 Chronology of key bilateral agreements 90 5.1 ASEAN-6 top ten export commodities by two-digit HS codes in 2004 116 5.2 ASEAN-6 top ten import commodities by two-digit HS codes in 2004 117 5.3 ASEAN-6 top ten major import and export markets in 2001–2004 118 5.4 Other projects in the Mekong sub-region 124 6.1 Chronology of India–Pakistan conflicts 132 6.2 Gini coefficient and consumption shares by quintiles in Pakistan 141 6.3 Pakistan trade with India 143 6.4 Source, destination and value of informal imports 145 6.5 Source, destination and value of informal exports 146 6.6 Combined trade, 2005 146 6.7 Export potential from Pakistan 150 6.8 Export potential from India 151 6.9 Costing conflict: Siachen 154 6.10 Pakistan and India defence expenditures 154 Tables ix 7.1 A chronology of bilateral trade agreements 170 7.2 Estimated Zimbabwean informal imports from SADC countries 172 7.3 Estimated informal Zimbabwean exports to SADC countries 172 8.1 Military spending as percentage of federal budget 188 8.2 Bilateral trade 196 8.3 Global trade partners 196 9.1 Mainland China foreign trade by country (area) 212 9.2 Sources of realised FDI in China 213 9.3 Number of Taiwanese visitors to mainland China 214 9.4 Taiwan’s major trade partners 218 9.5 Taiwan’s investment in mainland China 219 Contributors Hernán Blanco is Executive Director and Founding Partner of RIDES, San- tiago, Chile. Oli Brown is a project manager and policy researcher for the International Institute for Sustainable Development’s (IISD) Trade and Investment, and Security programmes. Edmundo Claro is Associate Researcher at RIDES, Santiago, Chile. Peter Goldschagg is Associate Researcher at RIDES, Santiago, Chile. Shaheen Rafi Khan is Research Fellow at the Sustainable Development Policy Institute (SDPI), Islamabad, Pakistan. Hank Lim is Director of Research at the Singapore Institute of International Affairs (SIIA), Singapore. Mzukisi Qobo is Research Fellow at the South African Institute of Inter- national Affairs (SAIIA). Alejandra Ruiz-Dana is a researcher at the Recursos e Investigación para el Desarello Sustenable (RIDES), Santiago, Chile. Faisal Haq Shaheen is Visiting Research Associate at the SDPI, Islama- bad, Pakistan. Azka Tanveer is Research Assistant at the SDPI, Islamabad, Pakistan. Moeed Yusuf is a consultant on Economic Policy at the SDPI, Islama- bad, Pakistan. Foreword Flat world or a world of regions? While many have talked about globalisation and some suggest we live in a ‘flat’ world, regionalism has been a phenomenon that has been less remarked upon and studied. Yet, even with the lower costs of travel and transport, and the wonders of technology, there are still costs and constraints such as time and culture that lead globalisation to be incomplete.
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