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Clothes without an Emperor: Analysis of the preferential tariffs in ASEAN

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Author Info
Manchin, Miriam
Pelkmans-Balaoing, Annette O.

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Abstract

This paper examines the current state of intra-ASEAN trade under the preferential regime of the AFTA. It partly addresses some data problems and employs a gravity model to arrive at alternative ways of gauging the importance of preferences in the absence of data on the actual utilisation of AFTA preferential tariffs. Our results show that although the range of products where AFTA might have an influence is limited, preferences seem to matter when the differential margin between the MFN and preferential tariff rates reaches a critical amount, allowing regional exporters to cover the costs of requesting preferences. However, at very high differential margins, the significance of AFTA preferences seems to wane. This indicates either the presence of non-tariff measures which prevent traders from exploiting the huge tariff discounts offered by the AFTA, and or, the propensity of ASEAN to extend high preferences on products where little or no intra-ASEAN trade takes place.

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Publisher Info
Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 19 (2008)
Issue (Month): 3 (June)
Pages: 213-223
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Handle: RePEc:eee:asieco:v:19:y:2008:i:3:p:213-223

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  12. Yveline Lecler, 2002. "The cluster role in the development of the Thai car industry," International Journal of Urban and Regional Research, Blackwell Publishing, vol. 26(4), pages 799-814, December. [Downloadable!] (restricted)
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  15. Cadot, Olivier & Carrère, Céline & de Melo, Jaime & Tumurchudur, Bolormaa, 2005. "Product Specific Rules of Origin in EU and US Preferential Trading Agreements: An Assessment," CEPR Discussion Papers 4998, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  1. Manchin, Miriam & Pelkmans-Balaoing, Annette O., 2007. "Rules of origin and the web of East Asian free trade agreements," Policy Research Working Paper Series 4273, The World Bank. [Downloadable!]
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