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The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers

The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers
The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers
Using detailed data on trade and tariffs from 1992–2007, the chapter examines how the Association of Southeast Asian Nations (ASEAN) Free Trade Agreement has affected trade with nonmembers and external tariffs facing nonmembers. First, the chapter examines the effect of preferential and external tariff reduction on import growth from ASEAN insiders and outsiders across HS 6-digit industries. It finds no evidence that preferential liberalization has led to lower import growth from nonmembers. Second, the chapter examines the relationship between preferential tariff reduction and most-favored-nation (MFN) tariff reduction. It finds that preferential liberalization tends to precede external tariff liberalization. To examine whether this tariff complementarity is a result of simultaneous decision-making, it uses the scheduled future preferential tariff reductions (agreed to in 1992) as instruments for actual preferential tariff changes after the Asia crisis. The results remain unchanged, suggesting that there is a causal relationship between preferential and MFN tariff reduction. The chapter also finds that external liberalization was relatively sharper in the products where preferences are likely to be most damaging, providing further support for a causal effect. Overall, the results imply that the ASEAN agreement has been a force for broader liberalization.
9780199753987
Oxford University Press
Calvo-Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Freund, Caroline
fc1c3213-68f3-455e-aab1-890523f06e70
Ornelas, Emanuel
cf4f6d37-09cc-4774-838e-2d5b98ce5828
Barro, R.
Lee, J.-W.
Calvo-Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Freund, Caroline
fc1c3213-68f3-455e-aab1-890523f06e70
Ornelas, Emanuel
cf4f6d37-09cc-4774-838e-2d5b98ce5828
Barro, R.
Lee, J.-W.

Calvo-Pardo, Hector, Freund, Caroline and Ornelas, Emanuel (2011) The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers. In, Barro, R. and Lee, J.-W. (eds.) Costs and Benefits of Economic Integration in Asia. USA. Oxford University Press. (doi:10.1093/acprof:oso/9780199753987.003.0006).

Record type: Book Section

Abstract

Using detailed data on trade and tariffs from 1992–2007, the chapter examines how the Association of Southeast Asian Nations (ASEAN) Free Trade Agreement has affected trade with nonmembers and external tariffs facing nonmembers. First, the chapter examines the effect of preferential and external tariff reduction on import growth from ASEAN insiders and outsiders across HS 6-digit industries. It finds no evidence that preferential liberalization has led to lower import growth from nonmembers. Second, the chapter examines the relationship between preferential tariff reduction and most-favored-nation (MFN) tariff reduction. It finds that preferential liberalization tends to precede external tariff liberalization. To examine whether this tariff complementarity is a result of simultaneous decision-making, it uses the scheduled future preferential tariff reductions (agreed to in 1992) as instruments for actual preferential tariff changes after the Asia crisis. The results remain unchanged, suggesting that there is a causal relationship between preferential and MFN tariff reduction. The chapter also finds that external liberalization was relatively sharper in the products where preferences are likely to be most damaging, providing further support for a causal effect. Overall, the results imply that the ASEAN agreement has been a force for broader liberalization.

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Accepted/In Press date: November 2010
e-pub ahead of print date: September 2011
Published date: 2011

Identifiers

Local EPrints ID: 155553
URI: http://eprints.soton.ac.uk/id/eprint/155553
ISBN: 9780199753987
PURE UUID: f24c9058-bd87-4d5f-ac34-926870931ae7
ORCID for Hector Calvo-Pardo: ORCID iD orcid.org/0000-0001-6645-4273

Catalogue record

Date deposited: 01 Jun 2010 11:22
Last modified: 18 Feb 2021 17:06

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Contributors

Author: Caroline Freund
Author: Emanuel Ornelas
Editor: R. Barro
Editor: J.-W. Lee

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