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The Competitiveness and Complementarities of Agriculture Trade among ASEAN-5 Countries: An Empirical Analysis

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  • Mohammed Faiz Shaul Hamid
  • Mohamed Aslam

Abstract

The trade of agriculture products between ASEAN countries has grown rapidly since the establishment of the ASEAN Free Trade Area (AFTA). By using the Revealed Comparative Advantage (RCA) and Intra-Industry Trade (IIT) indexes, this study empirically analyses the competitiveness and complementarities among the ASEAN-5 countries for agriculture products. The results shows that IIT is relatively limited and RCA for Thailand, Indonesia and Vietnam revealed intense competition among each other in the agriculture sector. Interestingly, the results also showed that Vietnam strongly competed against Thailand and Indonesia, which was detrimental towards both these countries and resulted to these countries losing their competitiveness in several product categories. ASEAN-5 countries have also shown diverse trends of competitiveness for each product category in the agriculture industry and the level of competitiveness coupled with low intra-industry trade reflect that there are policy mismatches that curb further trade integration in the industry despite several efforts under AFTA.

Suggested Citation

  • Mohammed Faiz Shaul Hamid & Mohamed Aslam, 2017. "The Competitiveness and Complementarities of Agriculture Trade among ASEAN-5 Countries: An Empirical Analysis," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(8), pages 88-102, August.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:8:p:88-102
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    References listed on IDEAS

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    3. Xinshen Diao & Terry Roe & Agapi Somwaru, 2001. "What is the Cause of Growth in Regional Trade: Trade Liberalisation or RTAs? The Case of Agriculture," The World Economy, Wiley Blackwell, vol. 24(1), pages 51-79, January.
    4. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 327-377.
    5. Muhammad Ilyas & Tahir Mukhtar & Muhammad Tariq Javed, 2009. "Competitiveness among Asian Exporters in the World Rice Market," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 783-794.
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    Cited by:

    1. Nith, Kosal & Ly, Singhong, 2018. "Reinvigorating Cambodian agriculture: Transforming from extensive to intensive agriculture," MPRA Paper 93091, University Library of Munich, Germany, revised 23 Dec 2018.
    2. Nith, Kosal & Ly, Singhong, 2018. "Reinvigorating Cambodian agriculture: Transforming from extensive to intensive agriculture," MPRA Paper 93086, University Library of Munich, Germany, revised 23 Dec 2018.

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    More about this item

    Keywords

    agriculture trade; ASEAN free trade area; revealed comparative advantage;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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