ASEAN-FTA Impact on Rubber and Crude Palm Oil Export: An Empirical Evidence from IMT Countries

Isnurhadi Isnurhadi(1), Abdul Bashir(2*), Suhel Suhel(3),

(1) Universitas Sriwijaya
(2) Universitas Sriwijaya,
(3) Universitas Sriwijaya
(*) Corresponding Author


This study applies the gravity model to explore whether the establishment and the agreement of the ASEAN Free Trade Area (AFTA) have an impact on the export increase of rubber and crude palm oil commodity trade for the case ASEAN member countries namely, Indonesia-Malaysia-Thailand (IMT). The study uses time-series data, first for Indonesia using the period of 1996-2017 with trading partners as much as 21 countries for crude palm oil (CPO) commodity and 22 countries for rubber commodity. Secondly, the CPO export model for Malaysia using data during 1997-2017 with 23 trading partners countries. Thirdly, export rubber model for Thailand using a period of 1999-2017 with 16 trading partners countries. The estimate the Indonesian and Thailand export model for rubber commodity, and second, the same model also is estimated export CPO for the Indonesian and Malaysian. Generally, we found that the regression results it appears ASEAN member countries have not been fully benefited from the enactment of the AFTA, especially on the export of Indonesia's main commodities such as rubber and crude palm oil which destined for trading partners countries. As for the export of Thailand rubber and Malaysian crude palm oil, both countries are still relatively slightly better because the AFTA agreement has fully benefited. During the study period, the results of this study indicated that these three countries trade both commodities more intensely to the non-ASEAN countries

Full Text:



Akhmadi, H. (2017). Assessment the Impact Of Asean Free Trade Area (AFTA) on Exports of Indonesian Agricultural Commodity. AGRARIS: Journal of Agribusiness and Rural Development Research, 3(1), 9–14.

Ando, M. (2006). Fragmentation and vertical intra-industry trade in East Asia. North American Journal of Economics and Finance, 17, 257–281.

Baier, S. L., & Bergstrand, J. H. (2007). Do free trade agreements actually increase members’ international trade? Journal of International Economics, 71(1), 72–95.

Baldwin, R. E. (2007). Managing the Noodle Bowl: The Fragility of East Asian Regionalism. In Regional Economic Integration (No. 7).

Clausing, K. (2001). Trade creation and trade diversion in the Canada - United States Free Trade Agreement. Canadian Journal of Economics, 34(3), 677–696.

Jin, H. J., Koo, W. W., & Sul, B. (2006). The Effects of the Free Trade Agreement Among China, Japan and South Korea. Journal of Economic Development, 31(2), 55–72.

Lloyd, P. J., & Maclaren, D. (2004). Gains and Losses from Regional Trading Agreements: A Survey. The Economic Record, 80(251), 445–467.

Manchin, M., & Pelkmans-Balaoing, A. O. (2006). Rules of Origin and the Web of East Asian Free Trade Agreements (No. 4273; Issue July).

Ng, F., & Yeats, A. (1999). Production Sharing in East Asia: Who Does What for Whom and Why? In The Policy Research Working Paper (No. 2197).

Okabe, M., & Urata, S. (2014). The impact of AFTA on intra-AFTA trade. Journal of Asian Economics, 35, 12–31.

Pholphirul, P. (2010). Does AFTA Create More Trade for Thailand? An Investigation of Some Key Trade Indicators. Journal of Current Southeast Asian Affairs, 29(1), 51–78.

Plummer, M. G., Cheong, D., & Hamanaka, S. (2011). Methodology for Impact Assessment of Free Trade Agreements. Asian Development Bank.

Saleh, S., & Suprayitno, B. (2010). ASEAN Economic Integration: Trade Creation or Trade Diversion for Import of Indonesia Manufactures? Economic Journal of Emerging Markets, 2(1), 31–45.

Setiawan, E., Hartoyo, S., Sinaga, B. M., & Hutagaol, M. P. (2016). Impact of Rice Import Tariff and Quota on Food Security in Indonesia. International Journal of Sciences: Basic and Applied Research, 28(2), 220–232.

Setiawan, S. (2012). ASEAN-China FTA: The Impacts on The Exports of Indonesia and China. Buletin Ilmiah Litbang Perdagangan, 6(2), 129–149.

Siah, K. (2009). AFTA and the Intra-Trade Patterns among ASEAN-5 Economies : Trade-Enhancing or Trade-Inhibiting ? International Journal of Economics and Finance, 1(1), 117–127.

Susanto, D., Rosson, C. P., & Adcock, F. J. (2007). Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector. Journal OfAgricultural and Applied Economics, 39(1), 121–134.

The ASEAN Secretariat. (2015). ASEAN Economic Community Blueprint 2025. Association of Southeast Asian Nations (ASEAN).

United Nations Comtrade Database. (2016). Commodity Trade Statistics 2016.

Viner, J. (1950). Studies in The Theory of International Trade. George Allen & Unwin, Ltd.

Wong, C. K., Liew, V. K., & Arip, M. A. (2017). The Impact of ASEAN Free Trade Area on Intra-ASEAN Manufacturing Trade. International Journal of Business and Society, 18(3), 633–643.

World Bank. (2018). World Development Indicator.


Article Metrics

Abstract view : 377 times
PDF - 124 times PDF - 528 times


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License

Integrated Journal of Business and Economics is licensed under a Creative Commons Attribution 4.0 International License.