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Clothes without an Emperor: Analysis of the Preferential Tariffs in ASEAN

Author

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  • Miriam Manchin

    (University College London)

  • Annette O. Pelkmans-Balaoing

    (Erasmus University Rotterdam)

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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Suggested Citation

  • Miriam Manchin & Annette O. Pelkmans-Balaoing, 2007. "Clothes without an Emperor: Analysis of the Preferential Tariffs in ASEAN," Development Working Papers 223, Centro Studi Luca d'Agliano, University of Milano.
  • Handle: RePEc:csl:devewp:223
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    File URL: http://www.dagliano.unimi.it/media/WP2007_223.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Calvo-Pardo, Hector & Freund, Caroline & Ornelas, Emanuel, 2009. "The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers," LSE Research Online Documents on Economics 28602, London School of Economics and Political Science, LSE Library.
    2. Pomfret, Richard & Sourdin, Patricia, 2009. "Have Asian trade agreements reduced trade costs?," Journal of Asian Economics, Elsevier, pages 255-268.
    3. C. Fred Bergsten & Marcus Noland & Jeffrey J. Schott, 2011. "The Free Trade Area Of The Asia- Pacific : A Constructive Approach To Multilateralizing Asian Regionalism," Trade Working Papers 23200, East Asian Bureau of Economic Research.
    4. Okabe, Misa & Urata, Shujiro, 2014. "The impact of AFTA on intra-AFTA trade," Journal of Asian Economics, Elsevier, pages 12-31.
    5. Richard Pomfret & Uwe Kaufmann & Christopher Findlay, 2010. "Are Preferential Tariffs Utilized? Evidence from Australian Imports, 2000-9," School of Economics Working Papers 2010-13, University of Adelaide, School of Economics.
    6. Richard Pomfret, 2011. "Regional Integration in East Asia," Chapters,in: International Handbook on the Economics of Integration, Volume I, chapter 16 Edward Elgar Publishing.
    7. 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.
    8. Baldwin, Richard & Kawai, Masahiro, 2013. "Multilateralizing Asian Regionalism," ADBI Working Papers 431, Asian Development Bank Institute.
    9. Hamanaka, Shintaro, 2013. "A note on detecting biases in assessing the use of FTAs," Journal of Asian Economics, Elsevier, pages 24-32.
    10. Marilyne Huchet Bourdon & Chantal Le Mouël & Mindourewa Peketi, 2016. "The impact of regional trade agreements on agrifood trade flows: The role of rules of origin," Working Papers SMART - LERECO 16-08, INRA UMR SMART-LERECO.
    11. Richard Pomfret, 2009. "Regionalism in the Asia-Pacific Region: How Wide, How Deep?," School of Economics Working Papers 2009-31, University of Adelaide, School of Economics.

    More about this item

    Keywords

    ASEAN trade policy; free trade areas; empirical estimates of preference utilisation;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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