Evaluation of ASEAN–India Free Trade Regime: A General Equilibrium Approach

The study uses ex-ante simulations of the general equilibrium model to analyze deeper integration and forward looking liberalization measures undertaken by the ASEAN and India to assess the Indo-ASEAN trade in its present dispensation and its futuristic goals. In the first scenario, complete trade l...

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Bibliographic Details
Published in:Journal of Asian economic integration 2022-09, Vol.4 (2), p.160-175
Main Authors: Srivastava, Archana, Mathur, Rachna, Mathur, Somesh K.
Format: Article
Language:English
Subjects:
Equilibrium
Free trade
Liberalization
Meat
Natural resources
Simulation
Tariffs
Trade barriers
Trade liberalization
Welfare
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Summary:The study uses ex-ante simulations of the general equilibrium model to analyze deeper integration and forward looking liberalization measures undertaken by the ASEAN and India to assess the Indo-ASEAN trade in its present dispensation and its futuristic goals. In the first scenario, complete trade liberalisation takes place including both tariff and non-tariff barriers among the ASEAN countries itself. Although the tariffs are quite low among the ASEAN countries, yet there is need to go for complete tariff and non-tariff liberalisation as it constitutes an important part of the trade barriers. The deeper integration measures across ASEAN and India include not only tariff and non-tariff liberalisation but also movement of capital, introduction to output-oriented technologies in sectors like transport and communication, light manufacturing and meat, and meat products with input oriented technological progress in land and natural resources. We use the GTAP-10 to analyse the same and the results reveal huge gains for India and ASEAN nations in the deeper integration simulation scenario. If ASEAN nations liberalize unilaterally on its own as a standalone liberalization, then there would be negative welfare returns for India while it would turn positive for India in case of deeper integration. JEL Classification: F13, F15
ISSN:2631-6846
2631-6854
DOI:10.1177/26316846221114504