Clothes Without an Emperor: Analysis of the Preferential Tariffs in ASEAN
Centro Studi Luca d'Agliano Development Studies Working Paper No. 223
32 Pages Posted: 20 Feb 2007
Date Written: January 2007
This paper examines the current state of intra-ASEAN trade under the preferential regime of the AFTA. It partly addresses some data problems and employs a gravity model to arrive at alternative ways of gauging the importance of preferences in the absence of data on the actual utilisation of AFTA preferential tariffs. Our results confirm the wide-spread notion that the AFTA preferential scheme is of very little consequence to intra-regional trade. However, in that limited range of products where AFTA might have an influence, preferences seem to matter only when the differential margin between the MFN and preferential tariff rates reaches a critical amount, allowing regional exporters to cover the costs of requesting preferences.
Keywords: ASEAN trade policy, free trade areas, empirical estimates of preference utilisation
JEL Classification: F13, F14, F15
Suggested Citation: Suggested Citation