| Summary: | This research aims to analyze the phenomenon of trade creation and trade diversion that occurred after the ACFTA has been executed for the ASEAN 4 (Indonesia, Malaysia, Philippines, and Thailand). To see the impact of ACFTA towards the growth of the export growth, this research uses a model adopted from Ekanayake et al. (2010). We used a panel data analysis with sixteen cross-section data from seventeen countries and time series data from 1980 to 2011. Estimation indicates the existence of trade diversion in the case of ASEAN 4 and China as a group. The analysis result in individual country level show that ASEAN 4 members tend to increase exports of their products in ACFTA blocks compared to countries which are not incorporated in the ACFTA, this led to the trade diversion on exports commodity. Individually, Malaysia, Indonesia, and the Philippines also experienced trade diversion, while Thailand gained a trade creation gain the positive effect growth of exports.
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