The ASEAN Free Trade Agreement : Impact on Trade Flows and External Trade Barriers
Using detailed data on trade and tariffs from 1992-2007, the authors examine how the ASEAN Free Trade Agreement has affected trade with nonmembers and external tariffs facing nonmembers. First, the paper examines the effect of preferential and exte...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090610085729 http://hdl.handle.net/10986/4153 |
| Summary: | Using detailed data on trade and tariffs
from 1992-2007, the authors examine how the ASEAN Free Trade
Agreement has affected trade with nonmembers and external
tariffs facing nonmembers. First, the paper examines the
effect of preferential and external tariff reduction on
import growth from ASEAN insiders and outsiders across HS
6-digit industries. The analysis finds no evidence that
preferential liberalization has led to lower import growth
from nonmembers. Second, it examines the relationship
between preferential tariff reduction and MFN tariff
reduction. The analysis finds that preferential
liberalization tends to precede external tariff
liberalization. To examine whether this tariff
complementarity is a result of simultaneous decision making,
the authors use 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 findings also indicate that external liberalization was
relatively sharper in the products where preferences are
likely to be most damaging, proving 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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