Complex, overlapping trade rules in Asia increase firms’ costs and prevent them from using the region’s web of bilateral trade agreements. Mega-regional deals under discussion – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) – would remove many such cross-border impediments, enabling MNCs to build supply chains and production networks based on efficiencies rather than arbitrary rules.
Frontier Strategy Group’s flagship Ahead of the Curve report on The Future of Asian Trade Relations looks at a number of possible scenarios between now and 2020 depending on which deal is implemented. Taking the three most likely scenarios, we provide MNCs with a list of impacts on market potential and business operations, along with suggested actions to take. Two key actions include:
- Re-evaluate your production networks and supply chains in anticipation of the removal of cross-border impediments.
- Identify what restrictions to foreign investors will be removed and consider what opportunities may arise as a result.
“The bewildering array of bilateral trade agreements increases costs for companies the region,” said Josef Jelinek, FSG senior research analyst for China and author of this report. “Companies should take action based on the likely impacts on demand and operations highlighted in the scenarios we present.”
This report, and many others like it, is available in the Frontier Strategy Group Online store. Click here for sample pages to help you evaluate whether the report is right for you.