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 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.

Bibliographic Details

Main Authors:	Calvo-Pardo, Hector, Freund, Caroline, Ornelas, Emanuel
Format:	Policy Research Working Paper biblioteca
Language:	English
Published:	2009-06-01
Subjects:	ADMINISTRATIVE COSTS, AGGREGATE TRADE, AGRICULTURAL PRODUCTS, AVERAGE TARIFFS, AVERAGE TRADE, BARRIERS ON IMPORTS, BILATERAL FLOWS, BILATERAL OPPORTUNISM, BILATERAL TRADE, BILATERAL TRADE AGREEMENTS, BLOC IMPORTS, BLOC MEMBERS, BLOC PARTNERS, BLOC TARIFFS, BLOC TRADE, BUSINESS CYCLE, CURRENCY, CUSTOMS, CUSTOMS UNION, CUSTOMS UNION ISSUE, CUSTOMS UNIONS, DEVELOPING COUNTRIES, DUTY DRAWBACK, DUTY DRAWBACKS, DUTY-FREE TREATMENT, ECONOMIC INTEGRATION, EUROPEAN UNION, EXPORTERS, EXTERNAL IMPORTS, EXTERNAL LIBERALIZATION, EXTERNAL TARIFF, EXTERNAL TARIFFS, EXTERNAL TRADE, EXTERNAL TRADE BARRIERS, EXTERNAL TRADE POLICIES, FINAL GOODS, FREE ACCESS, FREE TRADE, FREE TRADE AGREEMENT, FREE TRADE AGREEMENTS, FREE TRADE AREA, FREE TRADE AREAS, FREE TREATMENT, GLOBAL FREE TRADE, GLOBAL TRADE, GRAVITY EQUATION, GRAVITY MODEL, GROWING TRADE, GROWTH RATE, GROWTH RATES, HIGH TARIFFS, IMPORT BARRIERS, IMPORT TARIFF, IMPORT-COMPETING SECTOR, IMPORTED INTERMEDIATE, INTERMEDIATE GOODS, INTERNAL LIBERALIZATION, INTERNAL TARIFFS, INTERNAL TRADE, INTERNAL TRADE LIBERALIZATION, INTERNATIONAL BANK, INTERNATIONAL ECONOMICS, INTERNATIONAL TRADE, INTERNATIONAL TRADE POLICY, INTRA-ASEAN TRADE, INTRABLOC IMPORTS, LOBBYING, MARKET ACCESS, MFN TARIFFS, MULTILATERAL LIBERALIZATION, MULTILATERAL SYSTEM, MULTILATERAL TARIFF REDUCTION, MULTILATERAL TRADE, MULTILATERAL TRADE LIBERALIZATION, MULTILATERAL TRADE NEGOTIATIONS, MULTILATERALISM, NON-TARIFF BARRIERS, NONMEMBER COUNTRIES, PARTNER COUNTRIES, POLICY RESEARCH, POLITICAL CONSIDERATIONS, POLITICAL ECONOMY, PREFERENTIAL LIBERALIZATION, PREFERENTIAL MARGIN, PREFERENTIAL MARGINS, PREFERENTIAL RATE, PREFERENTIAL RATES, PREFERENTIAL TARIFF, PREFERENTIAL TARIFF REDUCTION, PREFERENTIAL TARIFFS, PREFERENTIAL TRADE, PREFERENTIAL TRADE AGREEMENTS, PREFERENTIAL TRADING, PREFERENTIAL TRADING AREAS, PREFERENTIAL TREATMENT, PRICE EFFECTS, PRODUCT LEVEL, PROTECTIONIST, PROTECTIONIST BIAS, REGIONAL BLOCS, REGIONAL INTEGRATION, REGIONAL TRADE, REGIONAL TRADE AGREEMENT, REGIONAL TRADE AGREEMENTS, REGIONAL TRADE BLOCS, REGIONAL TRADE LIBERALIZATION, REGIONAL TRADING PARTNERS, REGIONALISM, RULES OF ORIGIN, STANDARD ERRORS, TARIFF ADJUSTMENTS, TARIFF BARRIERS, TARIFF CHANGES, TARIFF LIBERALIZATION, TARIFF NEGOTIATIONS, TARIFF ON IMPORTS, TARIFF RATES, TARIFF REDUCTION, TARIFF REDUCTIONS, TARIFF REVENUE, TRADE AGREEMENT, TRADE BLOC, TRADE BLOCS, TRADE CREATING, TRADE CREATION, TRADE DATA, TRADE DIVERSION, TRADE EFFECTS, TRADE FLOWS, TRADE GROWTH, TRADE IMPACT, TRADE INTEGRATION, TRADE LIBERALIZATION, TRADE NEGOTIATIONS, TRADE PARTNERS, TRADE PATTERNS, TRADE POLICIES, TRADE POLICY, TRADE PREFERENCES, TRADE REFORM, TRADE RESTRICTIONS, TRADE SYSTEM, TRADE TAXES, TRADING BLOCS, TRADING PARTNERS, TRADING SYSTEM, TRANSACTION COSTS, WORLD ECONOMY, WORLD TRADE, WORLD TRADE ORGANIZATION,
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
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