Re-assessment of Bilateral and Unilateral Trade Effects of ASEAN FTAs: A Theory-Consistent Structural Gravity Estimation

Abstract

This paper reinvestigates the bilateral and unilateral effects of five ASEAN free trade agreements (FTAs) by applying a theory-consistent structural gravity model that remains untouched in the existing literature. The findings suggest that ASEAN-China and ASEAN-Australia-New Zealand FTAs led to a decrease in the international trade among member countries and between member and non-member countries in relation to their internal trade. The ASEAN-Korea, ASEAN-Japan, and ASEAN-India FTAs did not have any significant impact on the member countries and non-member countries’ trade.