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Free Trade Area Membership as a Stepping Stone to Development : The Case of ASEAN

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  • Emiko Fukase
  • Will Martin

Abstract

This study investigates the economic impacts of accession to the ASEAN Free Trade Area (AFTA) by the new member countries of Cambodia, the Lao PDR, Myanmar, and Vietnam. The trade policies of these countries are examined, and a series of quantitative analyses were undertaken to evaluate the impacts of accession. The results showed that the static impacts of reducing tariffs against ASEAN members are beneficial, although the magnitude of the net gains is diminished by the trade diversion resulting from the discriminatory nature of the reforms. The binding commitments on protection rates under the AFTA plan provide an important initial step to more broader and more beneficial trade reforms. The study focuses on some of the key country-specific policy challenges associated with trade liberalization--such as declining tariff revenues in Cambodia, and the negative impacts on sensitive domestic industries in Vietnam. The study recommends that accession to AFTA be viewed as an important transitional step in the broader process of trade reform and institutional development needed for successful development and poverty alleviation.

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Bibliographic Info

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This book is provided by The World Bank in its series World Bank Publications with number 13847 and published in 2001-02.

ISBN: 0-8213-4887-6
Handle: RePEc:wbk:wbpubs:13847

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Related research

Keywords: International Economics and Trade - Trade and Regional Integration International Economics and Trade - Free Trade International Economics and Trade - Trade Policy Economic Theory and Research Environmental Economics and Policies;

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Cited by:
  1. Martin, Will, 2001. "Trade policy reform in the East Asian transition economies," Policy Research Working Paper Series 2535, The World Bank.
  2. Bernadette Andreosso-O’Callaghan, 2009. "How is the EU-ASEAN FTA viewed by ASEAN stakeholders?," Asia Europe Journal, Springer, vol. 7(1), pages 63-78, February.

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