The impact of AFTA on intra-AFTA trade

Misa Okabe, Shujiro Urata

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

ASEAN countries have liberalised 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 liberalisation 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. In addition, the analysis reveals 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, while 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.

Original languageEnglish
Pages (from-to)12-31
Number of pages20
JournalJournal of Asian Economics
Volume35
DOIs
Publication statusPublished - 2014 Dec 1

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Free trade area
Trade creation
Tariffs
Trade liberalization
Elasticity
Gravity model
Import
Product standards

Keywords

  • ASEAN Free Trade Area
  • Gravity model
  • Intra-regional trade
  • Trade creation effect

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this

The impact of AFTA on intra-AFTA trade. / Okabe, Misa; Urata, Shujiro.

In: Journal of Asian Economics, Vol. 35, 01.12.2014, p. 12-31.

Research output: Contribution to journalArticle

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