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Does AFTA create more trade for Thailand? : an investigation of some key trade indicators

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Pholphirul, Piriya

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Abstract This paper examines whether the ASEAN Free Trade Agreement (AFTA) creates trade for Thailand or actually diverts it away from the country. It does this by analyzing various trade indicators: the Export Similarity Index, the Intra-Industry Trade Index, and Revealed Comparative Advantage (RCA) rank correlation. By examining the patterns of trade between Thailand and other members of ASEAN, it reveals a high degree of similarity regarding the trade structure between Thailand and AFTA, which indicates that there will be fewer trade-creation benefits from AFTA and a greater likelihood of trade diversion once the AFTA scheme has been fully implemented. This similarity pattern explains the reasons for future collaboration among member countries and supportive arguments for the future extension of ASEAN ("ASEAN+"). Market-penetration and development strategies should be employed by Thai exporters when accessing the ASEAN market.
Keywords Thailand; Southeast Asia; ASEAN; free trade; commerce; export; economic development (on national level)
Classification International Relations, International Politics, Foreign Affairs, Development Policy; Economic Policy
Free Keywords South East Asian Studies; free trade agreements; AFTA; trade creation; trade diversionation and trade diversion; 2000-2010
Document language English
Publication Year 2010
Page/Pages p. 51-78
Journal Journal of Current Southeast Asian Affairs, 29 (2010) 1
ISSN 1868-4882
Status Published Version; peer reviewed
Licence Creative Commons - Attribution-Noncommercial-No Derivative Works