This chapter provides an overview of ASEAN trade patterns and the CEPT. This is done in order to set the stage for the ensuing empirical analysis. Intra and extra ASEAN trade patterns of the five (original) ASEAN countries for the years 1981, 1986 and 1991 are then examined. These years are chosen to coincide with the data used in the empirical analysis. Both total trade and trade in manufactures are considered. A brief overview of the CEPT follows. The CEPT is the backbone of AFTA. It is the main mechanism through which ASEAN will achieve its goal of free trade within the region by the year 2005. We also consider some of the more ambitious and wide-ranging reforms being mooted as part of a program commonly referred to as “AFTA-Plus”.

The Pattern of Intra-ASEAN Trade: An Overview

Tables 2.1, 2.2 and 2.3 present information on the share of intra- ASEAN imports, exports and total trade (imports plus exports) in total multilateral imports, exports and total trade, respectively, for each of the five ASEAN countries (and as a group) for the years 1981, 1986 and 1991. It is clear from all three tables that the share of intra-ASEAN trade in total multilateral trade is low. The share of intra-ASEAN imports in total imports in 1991 was 17.5 per cent, while the share of exports was just under 20 per cent. There is, however, a mild increase in the share of intra-ASEAN trade between 1981 and 1991. The countries with the highest share of intra-ASEAN trade are Singapore and Malaysia. For instance, Malaysia's intra- ASEAN imports increased from 18 to 21 per cent between 1981 and 1991, while its exports increased from 26.5 to 29 per cent over this period. Indonesia and the Philippines have very low shares of intra-ASEAN trade. The Philippines’ share of intra- ASEAN imports in 1991 was 9 per cent, while its share of exports was only 7 per cent.