Munich Personal RePEc Archive

THE EFFECTS OF ASEAN-CHINA FREE TRADE AGREEMENT ON BILATERAL TRADES

Wong, Colin Koh-King and Liew, Venus Khim-Sen and Arip, Mohammad Affendy (2021): THE EFFECTS OF ASEAN-CHINA FREE TRADE AGREEMENT ON BILATERAL TRADES. Published in: Journal of Southwest Jiaotong University , Vol. 56, No. 2 (30 April 2021): pp. 249-256.

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Abstract

This article adopts the augmented versions of Gravity Model to examine the effects of the signing of ASEAN-China Free Trade Agreement (ACFTA) on the bilateral aggregate trades. Specifically, ACFTA dummy variables are incorporated in the basic model is to estimate the direction and magnitude of the ACFTA effects. A total of 79 trading partners of ASEAN member countries plus China were examined in this article. The study finds that the Gross Domestic Product, population, natural endowment, distance and common language are the main determining factors of the bilateral trade for ASEAN member countries and its trading partners. Estimated results from this Augmented Gravity Model showed that ACFTA have increased the bilateral aggregate trades not only between intra-bloc member countries, but also between intra-bloc and extra-bloc countries. With this positive finding, ASEAN and China could consider to expand their free trade area to a broader regional perspective, to enhance economic growth and to reduce regional inequality.

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