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ASEAN economic integration: Trade creation or trade diversion for import of Indonesia manufactures?

Author

Listed:
  • Samsubar Saleh
  • Bambang Suprayitno

    (Fakultas Ekonomi, Universitas Gadjah Mada
    Fakultas Ekonomi, Universitas Negeri Yogyakarta)

Abstract

This research investigates the trade creation and trade diversion of Indonesia manufactures import from extra and intra ASEAN countries after ASEAN economic integration. Using regression analysis, the study suggests that Indonesia manufactures import has been diverted from extra ASEAN countries both in short run and long run. In the short run, the ASEAN economic integration does not result in trade creation for Indonesia manufactures import from intra-ASEAN countries. This might stems from the insignificant difference Common Effective Preferential Tariff (CEPT) and Most Favoured Nation (MFN) tariffs and the existence of non-tariff barriers.

Suggested Citation

  • Samsubar Saleh & Bambang Suprayitno, 2010. "ASEAN economic integration: Trade creation or trade diversion for import of Indonesia manufactures?," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 2(1), pages 31-45, April.
    • Handle: RePEc:uii:journl:v:2:y:2010:i:1:p:31-45
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    References listed on IDEAS

    as
    1. Suparna Karmakar, 2005. "India-ASEAN Cooperation in Services: An Overview," Indian Council for Research on International Economic Relations, New Delhi Working Papers 176, Indian Council for Research on International Economic Relations, New Delhi, India.
    2. Suparna Karmakar, 2005. "India-ASEAN Cooperation in Services: An Overview," Working Papers id:299, eSocialSciences.
    3. Indira M. Hapsari & Carlos Mangunsong, 2006. "Determinants of AFTA Members’ Trade Flows and Potential for Trade Diversion," Working Papers 2106, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic integration; trade creation; trade diversion; Indonesia manufactures;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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