The impact of Trade Facilitation on Trade Flows in ASEAN+3.

Abstract

Trade facilitation is one of the mechanisms to minimize the transaction costs and complexity of international trade. This study aims to analyse the impact of trade facilitation on trade flows in ASEAN+3. The methodology used is gravity panel data model of nine countries in the ASEAN+3 area, from 2007 to 2010. Based on a gravity data panel framework, the analysis found that in the agriculture raw sector eficiency of custom procedures, which is one of indicator of trade facilitation, have positive impact to trade flows. Meanwhile, in manufacture sector, trade facilitation is represented by eficiency of custom procedures and administration cost of import, improvement in eficiency of custom procedures have the positive impact in increasing the trade flows in ASEAN+3, on the other hand, increasing in administration cost of impor have negatif impact on trade flows. The trade flows is also determined by tariff, exchange rate, GDP per capita of importer countries, GDP per capita of exporter countries and economics distance in both sectors.