TRADE LIBERALIZATION AND EMPLOYMENT LINKAGES IN THE PACIFIC BASIN

I. INTRODUCTION HE Asian Pacific is the most dynamic region of the world economy. In the past three decades, this region has achieved growth rates that were considerably higher than those elsewhere. First, Japan experienced an unprecedented period of economic growth in the post-World War II era, and then became a tech- nological leader in the global market. The Asian NIEs (newly industrialized economies of the Republic of Korea, Taiwan, Hong Kong, and Singapore) fol- lowed Japan in growing from labor-intensive manufacturing to large-scale industry with increasingly skill-intensive products such as consumer electronics. More recently, China and ASEAN-Four (Thailand, Malaysia, Indonesia, and the Philippines) have posted even more impressive growth rates than the Asian NIEs, rapidly increasing their manufacturing capacity and exports of labor-intensive products. Overall, the Paci fic Asian share of world production has increased from less than 9 per cent in 1960 to 23 per cent in 1994. Altogether, these countries have significantly contributed to world economic growth and a dramatic expansion of international trade flows, becoming pacesetters for global economic development and models of efficient international specialization. Unlike Western Europe or North America, the Asia-Pacific region has dra- matically increased its intra-regional trade without region-wide free trade arrangements. Instead, the expansion of regional trade has been largely fueled by rapid East Asian growth and unilateral liberalization policies. 1 Asia-Pacific trade expansion has been associated with so-called " open regionalism," i.e., regional economic integration without discrimination against extra-regional economies (4) (8). Indeed, during the 1993 summit in Seattle, the leaders of Asia-Paci fic T