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Sara Hsu

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Trade creates jobs and lifts people out of poverty. And when that happens, societies stabilize and grow. And there is nothing like a stable society to fight terrorism and strengthen democracy, freedom and rule of law. -- Dennis Hastert Free trade should not mean free labor. -- Stephen F. Lynch

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Manufacturing is the production of goods for use or sale using labor and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.

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In Asia, manufacturing is carried out for export production as well as for domestic production. Opening up manufacturing trade in Asia provides MNCs with opportunities to gain access to markets. Asian companies/ MNCs are becoming increasingly competitive in manufacturing. Between 1992/3 and 2006/7, there has been a sharp increase in the share of parts and components in network trade across all countries in the region

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By 2006/7, manufacturing accounted for 92% of total exports from Asia, up from 78% 4 decades earlier. Manufacturing, machinery, and transport equipment especially information and communication technology (ICT) products and electrical goodshave played a pivotal role in this structural shift. The share of Asia in world machinery and transport equipment exports increased from 14.5% in 1994/95 to 42.4% in 2006/7.

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Processing trade provides a shortcut for developing countries to join the international division of labor and utilize their abundant labor forces. Processing trade involves importing parts and components from abroad as intermediate inputs, processing and assembling these intermediate inputs into finished products, and eventually re-exporting the processed products to the global market via international distribution and retail networks of MNCs.

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At least four factors seem to have underpinned East Asias continued attractiveness as a center of global production sharing. First, Asia exhibits great diversity in labor supply conditions and wages. Second, the relative factor cost advantage has been supplemented by more favorable trade and investment policy regimes, and better port and communication systems Third, as first-comers in this area of international specialization, countries in Southeast Asia seem to offer considerable agglomeration advantages for companies already located in the region. Fourth, for over 3 decades there has been rapid economic expansion in several countries which has brought about market thickness, or diversification of the composition of the traded goods of a country

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The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand. Asean Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore. The primary goals of AFTA seek to: Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and Attract more foreign direct investment to ASEAN.

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On the history of ASEAN: http://www.youtube.com/watch?v=4v2Ko Nwjv90

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Multinational corporations (MNCs) are the primary players today in the world's most dynamic industries and the driving force behind the global economy. Foreign direct investment (FDI) contributes to the structural and geographical diversification of multinational enterprises. Its principal aims are to slice up the production process and seize the comparative advantages particular to each participant in the supply chain (efficiency- seeking FDI), but also to gain access to foreign markets and sell directly to clients (marketseeking FDI).

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Countries engage in international trade for two basic reasons, each of which contributes to their gain from trade. First, countries trade because they are different from each other. Nations, like individuals, can benefit from their differences by reaching an arrangement in which each does the things it does relatively well. Second, countries trade to achieve economies of scale in production. That is, if each country produces only a limited range of goods, it can produce each of these goods at a larger scale and hence more efficiently than if it tried to produce everything. In the real world, patterns of international trade reflect the interaction of both these motives.

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In economics, the law of comparative advantage refers to the ability of a person or a country to produce a particular good or service at a lower marginal and opportunity cost over another. Even if one country is more efficient in the production of all goods (absolute advantage in all goods) than the other, both countries will still gain by trading with each other, as long as they have different relative efficiencies.

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Asia Pacific has a strong manufacturing market due to the availability of cheap labor. This translates into manufacturing huge amounts of textiles, electronics, automotive products, heavy equipment, consumer durable goods, and more. China, Japan and South Korea are major exporters of automobiles, industrial equipment and heavy machinery. Singapore, China, Japan, South Korea, Taiwan, and Malaysia are major exporters of semiconductors and electronic products. China and Indonesia are leaders in oil and textile exports.

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Asian trade includes exports and imports. Some goods are imported for processing (adding parts or packaging) and re-export. Asia exports a variety of goods and imports oil and raw materials from Middle East and Latin America. Also, luxury items, cars and electronics are imported from Europe and the USA. Major import commodities include food, energy products, defense equipment, aviation equipment, heavy vehicles and raw materials.

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A ' ('SEZ) is a geographical region that has economic and other laws that are more free- market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC), development of infrastructure and to increase the employment.

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Currently, a considerable part of the exports of many developing economies in Asia originate in EPZs or SEZs. For example, Chinas customs trade figures show that in 2009 nearly half of its exports originated from SEZs and other processing zones while one-third of its imports were bound to such zones. Around two-thirds of Chinas processing trade was undertaken by foreign owned enterprises. China became the worlds leading exporter of manufactured products in 2008, and the leader in total merchandise exports in 2009.

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The World Trade Organization is an organization for trade opening. It is a forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other. The WTO was born out of negotiations, and everything the WTO does is the result of negotiations.

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WTOs opponents, whose efforts were most conspicuously evident in Seattle, consist of a diverse set of activists in both developed and less-developed countries. In the developed countries (the so-called North), the opponents include labor unions, childrens rights advocates, environmentalists, and French farmers. Opposition to WTO in the South comprises both recent and long-standing infant industries in automotive and other manufactures, whose low productivity and high costs would make them vulnerable to competition from the North if WTO were to insist on removing the various forms of tariff and non-tariff protection they presently enjoy

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WTO Protest: http://abcnews.go.com/Archives/video/ nov-30-1999-anti-globalization-protests- 12225335

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Questions?