The Impact of AFTA on Intra-AFTA Trade
ASEAN countries have liberalized intra-ASEAN trade over the last 20 years by establishing the ASEAN Free Trade Area (AFTA). This paper aims to examine the impact of trade liberalization under AFTA on intra-ASEAN trade. By applying a gravity model, we find positive and significant trade creation effects from the tariff elimination for a wide range of products. We also find that the elasticity of tariff reduction on imports tends to be much larger than that on exports. Trade creation effects for the new ASEAN members are relatively small compared to those for the old members. Our results show that AFTA has been successful in promoting intra-AFTA trade, but we argue that further expansion may be achieved by increasing the use of AFTA and by reducing/removing non-tariff measures (NTMs) through such ways as improving customs procedures and harmonizing/mutually recognizing product standards.
|Date of creation:||May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.eria.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laura Serlenga & Yongcheol Shin, 2004.
"Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors,"
ESE Discussion Papers
105, Edinburgh School of Economics, University of Edinburgh.
- Yongcheol Shin & Laura Serlenga, 2004. "Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors," Econometric Society 2004 Far Eastern Meetings 671, Econometric Society.
- James E. Anderson & Eric van Wincoop, 2001.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
NBER Working Papers
8079, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
- James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
- Takahashi Katsuhide & Urata Shujiro, 2010.
"On the Use of FTAs by Japanese Firms: Further Evidence,"
Business and Politics,
De Gruyter, vol. 12(1), pages 1-17, April.
- TAKAHASHI Katsuhide & URATA Shujiro, 2009. "On the Use of FTAs by Japanese Firms: Further evidence," Discussion papers 09028, Research Institute of Economy, Trade and Industry (RIETI).
- Robert Scollay & John P. Gilbert, 2001.
"New Regional Trading Arrangements in the Asia Pacific?,"
Peterson Institute Press: Policy Analyses in International Economics,
Peterson Institute for International Economics, number pa63, 03.
- Robert Scollay & John P. Gilbert, 2001. "New Regional Trading Arrangements in the Asia Pacific?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa63, December.
- URATA Shujiro & OKABE Misa, 2010. "Trade Creation and Diversion Effects of Regional Trade Agreements on Commodity Trade," Discussion papers 10007, Research Institute of Economy, Trade and Industry (RIETI).
- Yusuf Shahid & M. Anjum Altaf & Kaoru Nabeshima, 2004. "Global Change and East Asian Policy Initiatives," World Bank Publications, The World Bank, number 14928.
- Scott L. Baier & Jeffrey H. Bergstrand, 2005.
"Do free trade agreements actually increase members’ international trade?,"
2005-03, Federal Reserve Bank of Atlanta.
- Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
- Feenstra, Robert C, 2002. "Border Effects and the Gravity Equation: Consistent Methods for Estimation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 491-506, December.
- 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.
- Yongcheol Shin & Laura Serlenga, 2007. "Gravity models of intra-EU trade: application of the CCEP-HT estimation in heterogeneous panels with unobserved common time-specific factors," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 361-381.
- Maurice J. G. Bun & Franc J. G. M. Klaassen & G. K. Randolph Tan, 2009. "Free Trade Areas And Intra-Regional Trade: The Case Of Asean," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 54(03), pages 319-334.
- Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
When requesting a correction, please mention this item's handle: RePEc:era:wpaper:dp-2013-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hiroshi Okasaki)
If references are entirely missing, you can add them using this form.