Free Trade Areas and Intra-Regional Trade: The Case of Asean

Bun, Maurice J. G.; Klaassen, Franc; Tan, G. K. Randolph

doi:10.1142/s0217590809003367

Cited by 5 publications

(4 citation statements)

References 27 publications

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“…Similar to Elliot and Ikemoto (2004), he found that AFTA has had trade creation effects and no export and import trade diversion effects. Bun, et al (2009) examine several models with various alternative specifications of the AFTA effect.…”

Section: Estimation Of Impact Of Tariff Elimination Under the Cept Scmentioning

confidence: 99%

The impact of AFTA on intra-AFTA trade

Okabe

Urata

2014

Journal of Asian Economics

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ASEAN countries have liberalized intra-ASEAN trade over the last 20 years by establishing the ASEAN Free Trade Area (AFTA). This paper aims to examine the impact of trade liberalization under AFTA on intra-ASEAN trade. By applying a gravity model, we find positive and significant trade creation effects from the tariff elimination for a wide range of products. We also find that the elasticity of tariff reduction on imports tends to be much larger than that on exports. Trade creation effects for the new ASEAN members are relatively small compared to those for the old members. Our results show that AFTA has been successful in promoting intra-AFTA trade, but we argue that further expansion may be achieved by increasing the use of AFTA and by reducing/removing non-tariff measures (NTMs) through such ways as improving customs procedures and harmonizing/mutually recognizing product standards.

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Section: Estimation Of Impact Of Tariff Elimination Under the Cept Scmentioning

confidence: 99%

The impact of AFTA on intra-AFTA trade

Okabe

Urata

2014

Journal of Asian Economics

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“…South Asia took much of its inspiration from the success story of the free trade bloc of the neighbor region, Southeast Asia, which formed AFTA (Association of South East Asian Nation's Free Trade Area) in 1992. Bun et al (2007) show that an enormous increase in bilateral trade flows within this region is not merely driven by economic growth of this region, but is in fact a consequence of its regional integration policy. More particularly, within an extended gravity model that accounts for unobserved heterogeneity, these authors show that AFTA has contributed 9 per cent to bilateral export growth per annum within the region after the inception of the free trade agreement.…”

Section: Review Of Selected Literaturementioning

confidence: 97%

How effective is the Free Trade Agreement in South Asia? An empirical investigation

Islam

Bloch

Salim

2014

International Review of Applied Economics

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“…Similar to Elliot and Ikemoto (2004), the result indicates that the AFTA has a trade creation effect; at the same time, the effects of the AFTA on trade between members and non-members was positive. Controlling for unobserved heterogeneity, by using a country-pair specific time trend, Bun et al (2009) apply two types of AFTA dummies, that is, an AFTA dummy that takes the value of one for members after the year 1992 and an AFTA dummy multiplied by the time trend, which captures the effects of gradual tariff reductions under the AFTA. They find that the AFTA positively affected trade during the sample periods and suggest that careful controls for the unobserved explanatory variables of the trend in trade are necessary for testing the impacts of the AFTA.…”

Section: Impacts Of the Afta On Trade In Goods In East Asiamentioning

confidence: 99%

East Asian Integration

Ing¹,

Richardson²,

Urata³

2019

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Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. List of figuresix List of tables xi Acknowledgements xv Notes on contributors xvii List of figures 2.1 Regional Trade Agreements (FTAs and Customs Unions) in the World 3.1 Tariff Reduction Schedule, 2011-2035 3.2 Annual Growth Rate of ASEAN's Real GDP (in percent), 2011-2035 3.3 Effects of the RCEP on ASEAN's Real GDP (Cumulative Deviation from the Baseline, in percent) 3.4 Effects of the RCEP on Real GDP for ASEAN Member States (Cumulative Deviation from the Baseline, in percent) 3.5 Effects of the RCEP on Export Volume for Indonesia, Lao PDR and the Philippines, Scenario 3 (Cumulative Deviation from the Baseline, in percent) 4.1 China's Exports to and Imports from ASEAN 4.2a Shares of the Top Five HS Products in ASEAN's Exports to China 4.2b Shares of the Top Five Products in ASEAN's Imports from China 4.3a Share of the Top Five Products in BCLM's Exports to China 4.3b Share of the Top Five Products in BCLM's Imports to China 5.1 The Number of FTAs among East Asian Countries 5.2 Shares of Exports and Imports of ASEAN with Australia, China, Japan, Korea and New Zealand 6.1 Export Performance of Thailand vis-à-vis Major FTA Partners between Pre-and Post-Signing of FTAs (as a share of Thai's total imports) 6.2 Relative Importance of Tariff Exemption Schemes in Thailand between 2006 and 2015 6.3 Import Share of Major FTA Partners between Pre-and Post-Signing of FTAs (Share of Thai's Total Imports) 7.1 Types of Product-Specific RoOs 7.2 A Representative Value Chain with Cumulation 7.3 ASEAN Member States' MFN and Preferential Average Tariffs 7.4 ASEAN's Total Imports from Its Main Trading Partners (in percent) 7.5 Distribution of MFN Tariffs in Chapters 84-86 (Machineryand Electronics Products) However, this trend has not continued in recent years and, if anything, has reversed. Indeed, the growth of China's imports from ASEAN firms has slowed down since 2011, accompanied by decreasing shares of the machinery and intermediate good sectors, and declining processing trade intensity. On the other hand, non-processing exports from indigenous Chinese firms to ASEAN have risen sharply, especially in these same sectors. Taken together, these forces turned ASEAN's trade surplus against China into a trade deficit, which might even widen in the years to come. The results imply that policymakers in ASEAN countries must make appropriate policy adjustments to cope with China's structural transformation towards a "new normal" model of trade growth in order to achieve a healthier trade balance with China in future.8 Shujiro Urata TPP negotiations. This kind of chain reaction or domino effect has been discerned concerning FTAs, and such a phenomenon is described as 'competitive regionalism' (Solis et al., 2009). RCEP negotiations missed several targets for conclusion. The 24 th round of negotiations finished in October 2018. The momentum for reaching an agreement has been strengthen...

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Free Trade Areas and Intra-Regional Trade: The Case of Asean

Cited by 5 publications

References 27 publications

The impact of AFTA on intra-AFTA trade

The impact of AFTA on intra-AFTA trade

How effective is the Free Trade Agreement in South Asia? An empirical investigation

East Asian Integration

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