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The economic success of East Asia was due to an export-led growth strategy, which was heavily dependent on the global trading system underpinned by the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). In recent years, however; East Asian countries have shifted their trade policy focus to regional agreements and made Free Trade Agreements (FTAs) among themselves arid with other regions. Government organization has been restructured to increase FTA activities. Generally, the current literature predicts that FTA activities of East Asia would help to increase the welfare of the region. In this paper; we offer a critical assessment of East Asia FTAs. We note that East Asia FTAs provide incomplete coverage of sectors and are likely to lead to an inefficient resource allocation. FTA movements are not matched with actual trade flows. The benefits of East Asia FTAs are fairly limited and potential benefits, if any, would not likely be materialized in the near future. Our overall assessment is that the recent policy shift in East Asian countries from multilateral trade orientation or unilateral action to regionalism or a parallel multilateral and regional trade approach will not produce much gain. The governments should increase their efforts at economic reform and reduce barriers to trade and investment, rather than to allocate more resource and manpower to FTA activities.

This paper aims to evaluate the impact of the subsidies established by Measure 123 of the Rural Development Policy on the productivity of a sample of agri-food and forestry companies in the region of Asturias over the period 2006-2009.

The authors estimate a stochastic frontier function which allows subsidies to be considered as affecting both the level of technical efficiency and technical progress.

The results show that while subsidies have a positive effect on the technical progress of companies in the agri-food industry, for the forestry industry, the effect materializes as an improvement in technical efficiency. Additionally, other factors affecting either, technical progress and technical efficiency were identified.

This study adopts a model that allows the separate identification of the effect of subsidies on the level of efficiency, on the one hand, and on the technical progress, on the other.