Has ASEAN Regional Cooperation changed its concentration of trade with APEC?

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Dr. Marissa Maricosa A. PaderonAssistant Professor

Ateneo de Manila University

Outline

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Overview of ASEAN and regional cooperation ASEAN and APEC

Intra-regional Trade Bilateral ASEAN-APEC Trade

Trade concentration between ASEAN and APEC: 1995-2013 Trade Entropy Index Bilateral Concentration Indices Bilateral Trade Intensity Index

Conclusions

•ASEAN from 1967 – 1975•PTA in 1976•Asian Financial Crisis and ASEAN: 1997-

98•ASEAN Economic Community in 2015

Overview of ASEAN and Regional Cooperation

Milestones of ASEAN Economic Cooperation

4

Source: Fig.1.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

•ASEAN Regional Forum (1994): peace & security

•ASEAN + 3: economic cooperation•ASEAN +1 FTAs: bilateral agreements

▫ China (ACFTA in 2002)▫ Japan (AJCEPA in 2003)▫Republic of Korea (AKFTA in 2005)▫Australia and New Zealand (AANZFTA in

2009)▫India (AIFTA in 2009)

•East Asia Summit (2005): dialogue & partnerships

ASEAN ‘centrality’ in regional cooperation

ASEAN centrality in interregional groups

6

Source: Fig.5.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

ASEAN centrality in trans-regional groupings

7

Source: Fig.5.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

ASEAN in Intra-regional trade

8

Brune

i

Cambo

dia

Indo

nesia

Lao D

PR

Mal

aysia

Mya

nmar

Philip

pine

s

Singa

pore

Thaila

nd

Vietn

am

0.05.0

10.015.020.025.030.035.040.045.050.0

Figure 3a. The Share of ASEAN members in Intra-regional Trade (%): 1995-2013

1995 2000 2005 2010 2013

APEC in Intra-regional Trade

9

Austral

ia

Brune

i

Canad

a

Chile

China

Hong

Kong

Indo

nesia

Japa

n

Korea

Mal

aysia

Mex

ico

New Z

eala

nd

Papua

New

Gui

nea

Peru

Philip

pine

s

Russia

Singa

pore

Taipe

i

Thaila

ndUSA

Vietn

am

0.0

5.0

10.0

15.0

20.0

25.0

30.0

19952005

2013

Figure3b. The Share of APEC economies in Intra-regional Trade (%)

1995 2000 2005 2010 2013

Share of ASEAN and APEC to each other’s trade

10

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

Figure 4. ASEAN's and APEC's Share of Each Other's Trade; 1995-2013

% SHARE OF APEC TO ASEAN TRADE % SHARE OF ASEAN TO APEC TRADE

Note: Author’s estimation based on UNCTAD Statistics, 2015

APEC is a major regional market for ASEAN exports

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1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

-

200,000,000.00

400,000,000.00

600,000,000.00

800,000,000.00

1,000,000,000.00

1,200,000,000.00

1,400,000,000.00

1,600,000,000.00

1,800,000,000.00

2,000,000,000.00

Fig. 5a. Geographical breakdown of ASEAN Exports: 1995-2013

USA Japan China EU (28) Intra-ASEAN APEC

Source: UNCTAD Statistics, 2015

APEC as a major source of ASEAN imports

12

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

-

200,000,000.00

400,000,000.00

600,000,000.00

800,000,000.00

1,000,000,000.00

1,200,000,000.00

1,400,000,000.00

1,600,000,000.00

1,800,000,000.00

2,000,000,000.00

Figure 5b. Geographical breakdown of ASEAN Imports: 1995-2003

USA Japan China EU (28) ASEAN APEC

Source: UNCTAD Statistics, 2015

ASEAN-APEC TRADE:1995-2013

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

-200000000

0

200000000

400000000

600000000

800000000

1000000000

1200000000

Figure 6. ASEAN-APEC Trade: 1995-2013

ASEAN-APEC Balance of Trade Asean Exports to APEC ASEAN Imports from APEC

Source of basic data: UNCTAD Statistics, 2015

Top APEC economies trading partners of ASEAN: 2013

•Exports ▫China (12.1%)▫ Japan (9.7%)▫USA (9.1%)▫Hong Kong (6.4%)▫Malaysia (6.4%)▫Singapore (5.3%)▫ Indonesia (5.2%)▫Korea (4.2%)▫Thailand (3.1%)▫Vietnam ▫Philippines (1.5%)

• Imports▫China (16.5%)▫Japan (9.1%)▫USA (7.3%)▫Singapore (6.8%)▫Korea (6.3%)▫Malaysia (5.9%)▫Chinese Taipei (5.1%)▫Thailand (4.1%)▫Australia (1.8%)▫Vietnam (1.5%)

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Product composition of ASEAN trade with APEC:2013

15

All

Produ

cts

Capita

l goo

ds

Consu

mer

goo

ds

Inte

rmed

iate

goo

ds

Raw m

ater

ials

Anim

al

Chem

ical

s

Food

Produ

cts

Footw

ear

Fuels

Hides

and

Ski

ns

Mac

h an

d Ele

c

Met

als

Min

eral

s

Misc

ella

neou

s

Plast

ic o

r Rub

ber

Stone

and

Gla

ss

Textil

es a

nd C

loth

ing

Trans

porta

tion

Veget

able

Woo

d

0

100000000

200000000

300000000

400000000

500000000

600000000

700000000

800000000

900000000

Figure 7. Sectoral composition of ASEAN Trade with APEC, 2013

ASEAN 10 EXPORTS to APEC ASEAN 7 IMPORTS from APEC ASEAN 7 EXPORTS to APEC ASEAN 7 IMPORTS from APEC

YEAR TE xi TE mi

1995 0.21 0.21

2002 (AFTA) 0.20 0.20

2005 (ASEAN +1 FTAs)

0.20 0.21

2009 (ASEAN+ ANZ/INDIA)

0.23 0.22

2010 (ATIGA) 0.22 0.21

2011 0.23 0.23

2012 0.22 0.23

2013 0.22 0.23

ASEAN and APEC Trade Entropy Index

Note: Author’s estimations based on UNCTAD Statistics online database

ASEAN bilateral concentration index with APEC:1995-2012

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00

0.05

0.10

0.15

0.20

0.25

Figure 9. Normalized Herfindahl indices of ASEAN with APEC Trade: 1995-2012

Normalized Herfindahl (export) Normalized Herfindahl (import)

Source: UNCTAD Trade Statistics online database

 

Bilateral trade intensity index

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YEAR Bilateral Trade Intensity Index

1995 1.66

2002 (AFTA) 1.67

2005 (ASEAN +1 FTAs) 1.72

2009 (ASEAN+ ANZ/INDIA)

1.62

2010 (ATIGA) 1.56

2011 1.58

2012 1.56

2013 1.57Note: Author’s estimations based on UNCTAD Statistics online database. 

Trends in ASEAN Exports to APEC

1995-2002 2002-2005 2005-2009 2009-2010 2010-2011 2011-2012 2012-2013

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

Figure 9a. Percentage changes of ASEAN exports to APEC: 1995-2013

Brunei Cambodia Indonesia Lao DPR MalaysiaMyanmar Philippines Singapore Thailand Vietnam

Trends in ASEAN Imports from APEC

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1995-2002 2002-2005 2005-2009 2009-2010 2010-2011 2011-2012 2012-2013

-50.0

0.0

50.0

100.0

150.0

200.0

Figure 9b. Percentage changes of ASEAN imports from APEC: 1995-2013

Brunei Cambodia Indonesia Lao DPR Malaysia Myanmar Philippines

Singapore Thailand Vietnam

•ASEAN trade with APEC more concentrated across the years of regional cooperation. ▫trading of ASEAN is restricted only to a

small number of APEC economies as evidenced by the almost constant low values of trade entropy indices for exports and imports.

Conclusions

• Normalized Herfindahl-Hirschmann Index:▫Exports of ASEAN with APEC were concentrated

in a few products or export sectors revealed by higher indices on export side from 1995 until 2000 .

▫Concentration level shifted to higher indices of import side from 2001 to 2003; and tapered off onwards at almost the same values with those of export side. As ASEAN integrates internally with its members

and externally with bilateral partners in East Asia (ASEAN +1 FTAs), ASEAN’s trade with APEC was becoming dispersive rather than less concentrated in a few sectors.

•Bilateral trade intensity index:▫bilateral ASEAN-APEC trade is intensive

from 1995 to 2005 (ASEAN established ASEAN+1 FTAs).

▫bilateral trade indices remained greater than ‘1’ meaning bilateral trade intensity was greater than expected but at a declining trend may imply that ASEAN might have traded

more intensively with other countries than APEC economies.

• Exports of ASEAN APEC generally positive but at a decreasing rate, meaning ASEAN export products are destined to markets other than APEC economies, a trade diversion effect.▫ Intra-ASEAN trade grew by 27% in 2000; 32% in

2010 after the CEPT fast track program and the ATIGA, respectively, indicating trade creation effects of ASEAN integration.

▫ Yet, APEC remains a major market destination of ASEAN exports as evidenced by high country concentration of exports to APEC. APEC’s share to ASEAN exports accounted for an annual average of 74.3% of total ASEAN exports from 1995 to 2013.

• More dynamic import trading relation between APEC & non-APEC economies Lao PDR, Myanmar and Cambodia

• Imports of ASEAN to APEC generally rising until 2005 (AFTA fully implemented), while share of APEC to ASEAN imports slowed a bit in same period.

• After ATIGA implementation in 2010, imports of ASEAN to APEC dropped by 25% from 45% in 2009 (mainly due to the US Financial Crisis). It recovered in 2010 but slowed down onwards. Share of APEC’s to ASEAN’s total imports stood at 82%▫ indicating APEC’s exports highly depend on the

changes in the demand of the ASEAN market and shocks affecting imports and supply of exports.

•The above findings suggest that effects of ASEAN regional cooperation on trade concentration with APEC seem restrictive to a few APEC economies but trade has been dispersive in sectors.

Thank you