The Impact of ASEAN Free Trade Area and ASEAN-China Free Trade Agreements on ASEAN Trade

• Main Author: Wong, Colin Koh King
• Format: Thesis
• Language: English; English
• Published: Universiti Malaysia Sarawak(UNIMAS) 2018
• Subjects: HB Economic Theory
• Online Access: http://ir.unimas.my/id/eprint/30459/1/The%20Impact%20of%20ASEAN%20Free%20Trade%2024pgs.pdf; http://ir.unimas.my/id/eprint/30459/4/The%20Impact%20of%20ASEAN%20Free%20Trade%20ft.pdf; http://ir.unimas.my/id/eprint/30459/
• Institution: Universiti Malaysia Sarawak

This study aims to examine the impact of the signing of AFTA and ASEAN-China Framework Agreement on the bilateral aggregate trade and manufacturing trade between ASEAN member countries plus China and its selected 79 trading partners for the period between 1999 and 2015 by applying the gravity model in panel estimation. The validations of ASEAN Free Trade Area (AFTA) established based on the formation of a single market and production base. This study examines whether the implementation of AFTA is able to stimulate the intra- and extra-regional trade between the ASEAN member countries. Besides, this study analyses the impact of ASEAN–China Free Trade Area (ACFTA) on the bilateral aggregate trade and manufacturing trade between the ASEAN member countries. From the basic gravity variables, the study finds that the GDP, population, relative endowment, distance and common language are the main determining factors of the bilateral trade for ASEAN member countries and its trading partners. Moreover, the estimated results showed that AFTA and ACFTA have increased the bilateral aggregate trade volumes not only between intra-bloc member countries, but also between intra-bloc and extra-bloc countries. In the case of total manufacturing trade, the positive estimated results confirmed that reducing tariff barriers in AFTA and ACFTA help to stimulate the trade volumes not only between intra-bloc member countries, but also between intra-bloc and extra-bloc countries.