| Abstract: | This paper evaluates the ASEAN Free Trade Area (AFTA) which has been accepted as an ASEAN endeavour to be achieved by 2008 in the Singapore Summit in 1992. Noting the new circumstances and environment which have prompted a more proactive strategy of economic integration, the paper first surveys empirical studies on the economic impact of complete trade liberalisation. The consensus is that AFTA would not have a substantial impact in increasing intra-ASEAN trade. This suggests that AFTA, like previous ASEAN efforts at economic cooperation, seems more a political than economic effort. The inherent lack of complementarity in trade remains though the ASEAN countries' industrial structures have become more competitive and complementary. The paper however concludes that AFTA would still be useful as a demonstration of ASEAN solidarity and commitment especially if supplemented by other measures such as more deregulation and cross-country investment and other exchanges of factors like technology and human resource development. |
