LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE The Dynamics of Preferential Trade Agreements and Domestic Institutions - An Alternative Route towards Asian Regionalism: A Case Study of Singapore and Thailand’s Preferential Trade Agreements Krirkbhumi Chitranukroh A thesis submitted to the Department of International Relations of the London School of Economics and Political Science for the degree of Doctor of Philosophy in International Relations 2008 l UMI Number: U61590B All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U615903 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. 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I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. £ Krirkbhumi Chitranukroh 2 Abstract The greatest concentration of regionalism in international trade today can be found in the Asian Pacific region, and the number of international trade agreements in that region is still rising. In the general literature on regionalism, some proponents claim that regionalism can be a test-site for developing countries to enhancing their institutional capacity, before they actively engage in future trade liberalising agreements. Could the institutional enhancement explain the rise of regionalism in the Asian region? This claim, however, remains empirically untested. This thesis aims to examine this claim by observing the effects inter-regional trade agreements have on developing countries, especially on provisions that eliminate regulatory barriers to trade, and how those provisions may enhance institutional capacity to tackle future trade agreements with regulatory barriers to trade. More importantly, the thesis examines whether those improvements contribute to developments of their own intra-regional trade agreements. The case study countries chosen are Singapore and Thailand because they have spearheaded the most trade agreements in the region. The thesis examines the effects of regionalism on domestic institutions both at the macro level - general institutions involved with trade policy making, and the micro level - specific institutions involved with the regulatory aspect of trade. To obtain a more comprehensive account of institutional development, the micro level includes two types of institutions: one on the development of trade facilitation, representing trade in goods; the other on the movement of persons, representing trade in services. Overall, developments at the macro and micro levels - improvements in negotiating capacity, moderate progress in governmental cooperation, creation of new governmental agencies, greater involvement of the business community and inputs from civil society -have all contributed to building the case study countries’ institutional capacity. This in turn allowed them similarly to improve regulatory barriers to trade in their own intra-regional trade agreements, illustrating how trade agreements enhance developing countries’ domestic institutions to engage in future trade agreements. 3 Table of Contents THE DYNAMICS OF PREFERENTIAL TRADE AGREEMENTS AND DOMESTIC INSTITUTIONS - AN ALTERNATIVE ROUTE TOWARDS ASIAN REGIONALISM: A CASE STUDY OF SINGAPORE AND THAILAND’S PREFERENTIAL TRADE AGREEMENTS...........................................................................1 ABSTRACT...................................................................................................................................3 TABLE OF CONTENTS.............................................................................................................4 LIST OF FIGURES...................................................................................................................... 8 LIST OF TABLES........................................................................................................................ 8 ABBREVIATIONS...................................................................................................................... 9 ACKNOWLEDGEMENTS.......................................................................................................11 1 CHAPTER I INTRODUCTION..................................................................................... 12 1.1 Stating the Research Qu e stio n :........................................................................................12 1.1.1 Setting the Scene: .................................................................................................... 12 1.1.2 The Research Questions: ........................................................................................ 17 1.1.3 The Hypothesis ........................................................................................................20 1.2 Research M eth o d : .....................................................................................................................23 1.2.1 Case Study Approach: Why Singaporean and Thai PTAs? ..................................23 1.2.2 Which Horizontal Policy Areas? ............................................................................25 1.2.3 Delimitation and Time Period ............................................................................... 26 1.2.4 Timeline Comparison Approach .............................................................................26 1.2.5 Interviews................................................................................................................27 1.2.6 Documentary Research ...........................................................................................28 1.3 Thesis Ou t l in e ...............................................................................................................................28 2 CHAPTER II PREFERENTIAL TRADE AGREEMENTS & DOMESTIC INSTITUTIONAL CAPACITY: BUILDING CONCEPTUAL FRAMEWORKS 31 2.1 Introduction ................................................................................................................................ 31 2.2 C onceptualising M odern PTAs ..........................................................................................32 2.2.1 Old Regionalism: Static Effects on Individual Countries ..................................... 33 2.2.2 Old Regionalism: Dynamic Multilateral Implications ......................................... 34 2.2.3 Limited Empirical Findings of Old Regionalism ..................................................36 2.2.4 New Regionalism .................................................................................................... 37 2.3 C onceptualising D omestic Interactions .....................................................................42 2.3.1 PTAs and Domestic Variables ................................................................................43 2.3.2 Role of Interest Groups ........................................................................................... 43 2.3.3 Role o f Institutions .................................................................................................. 45 2.3.4 Institutions and PTAs .............................................................................................. 47 2.3.5 Institutions and PTAs with Regulatory Barriers to Trade ....................................48 2.3.6 Locking in Institutions and PTAs with Regulatory Barriers to Trade ................. 49 2.4 The An aly tic a l Fr a m e w o r k s ..............................................................................................50 2.4.1 Institutional Trade Capacity: .................................................................................51 2.4.1.1 The channels PTAs affect Domestic Institutional Trade Capacity 52 2.4.1.2 Institutional trade capacity framework ....................................................................54 2.4.2 Deeper Regional PTA Integration Framework: Dynamic Implications for Regional Integration ............................................................................................................66 2.5 C o n c l u sio n :...................................................................................................................................69 4 3 CHAPTER III SINGAPORE AND THAILAND’S PTAS.......................................... 71 3.1 Introduction ................................................................................................................................. 71 3.2 The G r a