SDGs’ Indicators for Trade Facilitation and the Regional Comprehensive Economic Partnership (RCEP) in ASEAN

The paper empirically examines how trade liberalization would help the ASEAN countries to achieve Sustainable Development Goals (SDGs). Evidence shows a positive relationship between intra-ASEAN trade openness and poverty alleviation. It reveals that relatively low-income countries could have gain more from the intraregional trade openness. A strong positive relationship exists between agricultural trade openness and food security in these countries. The impact of trade liberalization on employment generation is, however, not conclusive. Findings imply that trade openness may reduce income inequalities in Indonesia and Viet Nam but may induce higher inequalities in Malaysia and Lao PDR. Trade liberalization seems to have a moderate positive impact on gender equality in this region. Other than Myanmar and Malaysia, the rest of the countries experience a positive impact of Low-Carbon Goods trade on their respective environmental improvement. To understanding how the countries can further open their intraregional trades more efficiently, the Stochastic Frontier Gravity model is applied. In aggregate, the whole region has a weighted average trade efficiency of 68.6%, revealing that countries can increase the untapped potential of intraregional trade by 31.4% equivalent to 355.1 billion USD per annum through removing the existing trade barriers. Institutional development, infrastructure, and technological readiness- all have positive impacts on the trade efficiency of the countries. The paper also examines the role of the proposed Regional Comprehensive Economic Partnership (RCEP) bloc in trade facilitation for the ASEAN region. ASEAN has experienced an average export growth of 23% within the RCEP, out of which 13% growth is contributed by the intraregional trade within ASEAN while the rest 10% growth is contributed by outside ASEAN. Interestingly, the smaller economies, such as Cambodia, Lao PDR, Myanmar, and Viet Nam, are more inclined to an outsider for their respective export growth, which is a significant factor to consider for forming RCEP and attaining SDGs.