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Trade creation and diversion effects of ASEAN-plus-one free trade agreements

Author

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  • Hiroyuki Taguchi

    (Saitama University)

Abstract

This article examined the trade creation and diversion effects of ASEAN-plus-one free trade agreements (FTAs) by estimating the gravity trade model for the recent two decades between 1993 and 2013. The estimation applied the panel-data with fixed effects to clear the FTA-endogeneity problem. The empirics showed that the trade creation effect in ASEAN-China FTA (ACFTA) was much larger than those in ASEAN-Korea FTA (AKFTA) and ASEAN-Japan FTA (AJFTA), and that the trade diversion effects were commonly negative in ACFTA, AKFTA and AJFTA as expected. The larger trade creation effect in ACFTA might come from the wider gap between the general tariff rate and the preferential tariff rate for ASEAN in China.

Suggested Citation

  • Hiroyuki Taguchi, 2015. "Trade creation and diversion effects of ASEAN-plus-one free trade agreements," Economics Bulletin, AccessEcon, vol. 35(3), pages 1856-1866.
    • Handle: RePEc:ebl:ecbull:eb-15-00324
    as

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    References listed on IDEAS

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    Cited by:

    1. Taguchi, Hiroyuki & Nishi, Emiko Darcy, 2017. "Trade effects of ASEAN-plus-China and -Japan free trade agreements by production stage and industry," MPRA Paper 81628, University Library of Munich, Germany.
    2. Choong, Pai Wei & khalifah, noor & Mohd Nor, Abu Hassan Shaari & Ismail, Mohd Adib, 2018. "Free Trade Agreements and Production Sharing in Malaysian Manufacturing Industries," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(3), pages 91-106.

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    More about this item

    Keywords

    trade creation and diversion effects; ASEAN-plus-one; free trade agreement;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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