The Effects of ASEAN-China Free Trade Agreement on Bilateral Trades

This article adopts the augmented versions of Gravity Model to examine effects signing ASEAN-China Free Trade Agreement (ACFTA) on bilateral aggregate trades. Specifically, ACFTA dummy variables are incorporated in basic model is estimate direction and magnitude effects. A total 79 trading partners ASEAN member countries plus China were examined this article. The study finds that Gross Domestic Product, population, natural endowment, distance, common language main determining factors trade for their partners. Estimated results from Augmented showed had increased trades not only between intra-bloc but also extra-bloc countries. With positive finding, could consider expanding free area a broader regional perspective, enhancing economic growth reducing inequality.