Regional Trade Agreement and International Trade An Empirical Study of ASEAN

This paper analyses the actual impact of import tariffs and of ASEAN membership on trade flows of ASEAN member countries and non-member countries. The Poisson Pseudo-Maximum Likelihood (PPML) econometric model is used to obtain consistent estimates in the presence of heteroscedasticity. Three groups...

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Bibliographic Details
Published inASEAN economic bulletin Vol. 40; no. 2; pp. 198 - 213
Main Authors Wang, Di, Wang, Zhimin, Xie, Yuying, Zhong, Litao
Format Journal Article
LanguageEnglish
Published Singapore ISEAS - Yusof Ishak Institute 01.08.2023
ISEAS–Yusof Ishak Institute
Institute of Southeast Asian Studies (ISEAS)
Subjects
Commercial treaties
Econometric models
Econometrics
Economic growth
Economic models
Exports
Free trade
Imports
International trade
Product differentiation
Regional Comprehensive Economic Partnership
Regions
Tariffs
Trade agreements
Trade flows
Variables
Iran
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Summary:This paper analyses the actual impact of import tariffs and of ASEAN membership on trade flows of ASEAN member countries and non-member countries. The Poisson Pseudo-Maximum Likelihood (PPML) econometric model is used to obtain consistent estimates in the presence of heteroscedasticity. Three groups of fixed effect variables are used to address concerns related to omitted control variables. The findings show that, while low import tariffs promote imports of the member countries, they also boost exports from the member countries. More interestingly, the effect spills over to the non-member major trade partners even though the impact is more prominent for member countries, which can be attributed to ASEAN’s recent efficiency improvements. This study also sheds light on the prospect of the Regional Comprehensive Economic Partnership (RCEP) on account of the overlap between RCEP and ASEAN.
ISSN:2339-5095
2339-5206
DOI:10.1355/ae40-2b