Trade Creation and Diversion Effects of AIFTA Implementation

The number of Free Trade Agreements (FTA) based on each region or so called as Regional (RTA) has been increased rapidly after the World Organization (WTO) continues to increase from year year. This cause international trade are becoming autonomous. Indonesia's participation at ASEAN-India Agreement (AIFTA)greatly affect economy due strategic partnership which tied between Indonesia and India. research intention explore more relates impact creation diversion implementation AIFTA exports imports through aggregate disaggregated data consisting 6 commodities. sample used in this consisted 25 countries during 2006-2017. Poisson Pseudo Maximum Likelihood (PPML) were applied estimation method. With results shows that significantly negative towards export diversion. indicates there is a decline occurs non-AIFTA member countries. In data, net found food-drinks,tobacco livestock, energy products also raw materials. Furthermore, other manufactured goods machinery transport equipment.