Re-examining the impact of ACFTA on ASEAN's exports of manufactured goods to China

Siew Yean Tham, Kam Jia Yi Rew

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

There is a relatively large body of literature examining ASEANChina relations, including assessments of the impact of the ASEANChina Free Trade Agreement (ACFTA) on ASEAN's welfare and its trade with China. Overall, the results of these studies indicate a positive impact of ACFTA on the region's exports to China. These results differ from firm-level surveys that indicate a low utilization rate of most regional trade agreement tariff concessions, including those provided by ACFTA. Moreover, trade in manufactured goods in the region has been characterized as market-led, and governed by multinationals (MNCs) and their regional production networks. Thus, MNC decisions are the driving force influencing changes in manufactured parts and components trade in the region. This trade is also fostered by duty-free imports in the export enclaves provided by the host economies for these MNCs. In view of the conflicting empirical evidence on the trade effects of regional trade agreements, the objective of this study is to re-assess the impact of ACFTA on ASEAN's manufactured exports to China. In performing this analysis, we separately evaluate the effects of trade in parts and components (P&C) and nonparts and components (non P&C) or final manufactured goods. When we apply gravity estimation methods to individual regressions for these two forms of trade, we find that the determinants of trade are indeed different for the two sectors, and that the implementation of ACFTA had different effects on P&C versus final goods ASEAN exports to China.

Original languageEnglish
Pages (from-to)63-82
Number of pages20
JournalAsian Economic Papers
Volume13
Issue number3
DOIs
Publication statusPublished - 1 Oct 2014

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ASEAN
free trade
China
concession
import
welfare
utilization
Free trade agreements
determinants
firm
regression
economy
market
evidence

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance
  • Political Science and International Relations

Cite this

Re-examining the impact of ACFTA on ASEAN's exports of manufactured goods to China. / Tham, Siew Yean; Rew, Kam Jia Yi.

In: Asian Economic Papers, Vol. 13, No. 3, 01.10.2014, p. 63-82.

Research output: Contribution to journalArticle

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