TITLE:
Comparing the Effects of CAFTA on Internal Trade of China and ASEAN Countries
AUTHORS:
Tavi Supriana
KEYWORDS:
CAFTA; Internal Trade; Determinant Factors; Positive Effect; Negative Effect
JOURNAL NAME:
Technology and Investment,
Vol.4 No.3B,
October
24,
2013
ABSTRACT: This paper compares the effects of CAFTA on internal trade of China and ASEAN
Countries. ASEAN countries are analyzed individually, by developing two gravity
models and using the panel data of 7 samples countries and areas from 2002 to
2010. The empirical result shows that GDP, distance, exchange rate, population
and policy framework of CAFTA are trade determinant factors for China and ASEAN
countries. The effects of CAFTA implementation in this study can be divided in
four categories. Firstly, positive and significant effect. Singapore and Malaysia are gaining this effect.
Secondly, positive effect but not significant, China
and Thailand
are gaining this effect. Thirdly, negative but not significant. Indonesia is
having negative but not significant effect. Fourthly, negative and significant.
Philippines
is having this effect. Negative effect is happened to Indonesia and Philippines,
not significant for Indonesia,
but significant for Philippines.
These two countries are getting less compare to other ASEAN countries. The rank
of ASEAN countries that receive the greatest effect of CAFTA to the smallest
one, that is: Singapore, Malaysia, Thailand,
Indonesia and the last Philippines and
this result is similar with the rank of countries Total Factor Productivity (TFP)
growth rate.