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Trade Policy and Intraindustry Trade in Asean

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  • rasiah, rajah

    (Depatment of Economic Analysis and Public Policy Faculty of Economics Universiti Kebangsaan Malaysia Bangi, Selangor D.E.)

Abstract

This paper examines the role of markets and government in trade policy and the development of intraindustry trade using the ASEAN experience. Protection measures, the Grubel-Lloyd index, trade balance coefficient and trade structure were the principal tools used to facilitate analysis. The results show fairly low overall protection levels in ASEAN economies, though, in certain industries (especially heavy industries) there exists strong protection. Singapore appears to be least protected while the Philippines shows the highest level of protection. ASEAN economies also demonstrate strong export- orientation and considerable foreign capital participation. Singapore and Malaysia appear to have experienced the highest structural change. Singapore and Thailand show highest trade balance coefficients. There is also little structural sequencing (evolution) in the growth of industries in Singapore, Malaysia and Thailand. The paper also demonstrates strong government involvement in markets. The ASEAN experience shows that the creation of dynamic comparative advantage, through prioritizing, subsidising and shelter- ing industries, and encouraging foreign capital, can generate longterm market growth and has been important in stimulating economic growth and structural change.

Suggested Citation

  • rasiah, rajah, 1995. "Trade Policy and Intraindustry Trade in Asean," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 29, pages 161-181.
    • Handle: RePEc:ukm:jlekon:v:29:y:1995:i::p:161-181
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    References listed on IDEAS

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    1. Anne O. Krueger, 1983. "Trade and Employment in Developing Countries, Volume 3: Synthesis and Conclusions," NBER Books, National Bureau of Economic Research, Inc, number krue83-1, July.
    2. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    3. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
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