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Options for ASEAN trade expansion: Within, plus three or six, European Union or the United States?
Author(s) -
Beckman Jayson,
Gopinath Munisamy,
Daugherty Kamron
Publication year - 2021
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.13040
Subject(s) - computable general equilibrium , international trade , economics , beneficiary , trade facilitation , international economics , economic integration , european union , agriculture , international free trade agreement , trade barrier , customs union , welfare , free trade , trade diversion , china , political science , geography , macroeconomics , market economy , archaeology , finance , law
The ten member countries of the Association of Southeast Asian Nations (ASEAN) have pursued trade agreements with major trade partners (Plus Three—China, Japan and Korea; and Plus Six—Plus Three, Australia, New Zealand and India). The recent ASEAN move towards further economic integration suggests potential future agreements with other major trade partners. This study examines the economic opportunities for such expansion, focusing on several options for ASEAN: removing tariffs within the trading bloc, removing the remaining tariffs on trade with the six countries that they already have trade agreements with or more external options (agreements with either the EU or the US). We use a computable general equilibrium model (CGE) to examine these options, highlighting changes to both agriculture and non‐agriculture. Agriculture is the biggest beneficiary when considering an agreement with the EU or Plus Six, while non‐agriculture gains the most in an agreement with Plus Three or the US. Deeper integration through trade facilitation and realising technological spillovers increase welfare gains from select agreements.