1. Has ASEAN Regional Cooperation changed its concentration of trade with APEC? 1 Dr. Marissa Maricosa A. Paderon Assistant Professor Ateneo de Manila University

2. Outline 2 Overview of ASEAN and regional cooperation ASEAN and APEC Intra-regional Trade Bilateral ASEAN-APEC Trade Trade concentration between ASEAN and APEC: 1995-2013 Trade Entropy Index Bilateral Concentration Indices Bilateral Trade Intensity Index Conclusions

3. ASEAN from 1967 – 1975 PTA in 1976 Asian Financial Crisis and ASEAN: 1997-98 ASEAN Economic Community in 2015 Overview of ASEAN and Regional Cooperation

4. Milestones of ASEAN Economic Cooperation 4 Source: Fig.1.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

5. ASEAN Regional Forum (1994): peace & security ASEAN + 3: economic cooperation ASEAN +1 FTAs: bilateral agreements ▫ China (ACFTA in 2002) ▫ Japan (AJCEPA in 2003) ▫Republic of Korea (AKFTA in 2005) ▫Australia and New Zealand (AANZFTA in 2009) ▫India (AIFTA in 2009) East Asia Summit (2005): dialogue & partnerships ASEAN ‘centrality’ in regional cooperation

6. ASEAN centrality in interregional groups 6 Source: Fig.5.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

7. ASEAN centrality in trans-regional groupings 7 Source: Fig.5.1, ASEAN 2030: Towards a Borderless Economic Community, Asian Development Bank Institute, 2014.

8. ASEAN in Intra-regional trade 8

9. APEC in Intra-regional Trade 9

10. Share of ASEAN and APEC to each other’s trade 10 Note: Author’s estimation based on UNCTAD Statistics, 2015

11. APEC is a major regional market for ASEAN exports 11 Source: UNCTAD Statistics, 2015

12. APEC as a major source of ASEAN imports 12 Source: UNCTAD Statistics, 2015

13. ASEAN-APEC TRADE:1995-2013 Source of basic data: UNCTAD Statistics, 2015

14. Top APEC economies trading partners of ASEAN: 2013 Exports ▫China (12.1%) ▫Japan (9.7%) ▫USA (9.1%) ▫Hong Kong (6.4%) ▫Malaysia (6.4%) ▫Singapore (5.3%) ▫Indonesia (5.2%) ▫Korea (4.2%) ▫Thailand (3.1%) ▫Vietnam ▫Philippines (1.5%) Imports ▫China (16.5%) ▫Japan (9.1%) ▫USA (7.3%) ▫Singapore (6.8%) ▫Korea (6.3%) ▫Malaysia (5.9%) ▫Chinese Taipei (5.1%) ▫Thailand (4.1%) ▫Australia (1.8%) ▫Vietnam (1.5%) 14

15. Product composition of ASEAN trade with APEC:2013 15

16. YEARTE xi TE mi 19950.21 2002 (AFTA)0.20 2005 (ASEAN +1 FTAs)0.200.21 2009 (ASEAN+ ANZ/INDIA) 0.230.22 2010 (ATIGA)0.220.21 20110.23 20120.220.23 20130.220.23 ASEAN and APEC Trade Entropy Index Note: Author’s estimations based on UNCTAD Statistics online database

17. ASEAN bilateral concentration index with APEC:1995-2012 17 Source: UNCTAD Trade Statistics online database

18. Bilateral trade intensity index 18 YEARBilateral Trade Intensity Index 1995 1.66 2002 (AFTA) 1.67 2005 (ASEAN +1 FTAs) 1.72 2009 (ASEAN+ ANZ/INDIA) 1.62 2010 (ATIGA) 1.56 2011 1.58 2012 1.56 2013 1.57 Note: Author’s estimations based on UNCTAD Statistics online database.

19. Trends in ASEAN Exports to APEC

20. Trends in ASEAN Imports from APEC 20

21. ASEAN trade with APEC more concentrated across the years of regional cooperation. ▫trading of ASEAN is restricted only to a small number of APEC economies as evidenced by the almost constant low values of trade entropy indices for exports and imports. Conclusions

22. Normalized Herfindahl-Hirschmann Index: ▫Exports of ASEAN with APEC were concentrated in a few products or export sectors revealed by higher indices on export side from 1995 until 2000. ▫Concentration level shifted to higher indices of import side from 2001 to 2003; and tapered off onwards at almost the same values with those of export side.  As ASEAN integrates internally with its members and externally with bilateral partners in East Asia (ASEAN +1 FTAs), ASEAN’s trade with APEC was becoming dispersive rather than less concentrated in a few sectors.

23. Bilateral trade intensity index: ▫bilateral ASEAN-APEC trade is intensive from 1995 to 2005 (ASEAN established ASEAN+1 FTAs). ▫bilateral trade indices remained greater than ‘1’ meaning bilateral trade intensity was greater than expected but at a declining trend  may imply that ASEAN might have traded more intensively with other countries than APEC economies.

24. Exports of ASEAN APEC generally positive but at a decreasing rate, meaning ASEAN export products are destined to markets other than APEC economies, a trade diversion effect. ▫Intra-ASEAN trade grew by 27% in 2000; 32% in 2010 after the CEPT fast track program and the ATIGA, respectively, indicating trade creation effects of ASEAN integration. ▫Yet, APEC remains a major market destination of ASEAN exports as evidenced by high country concentration of exports to APEC. APEC’s share to ASEAN exports accounted for an annual average of 74.3% of total ASEAN exports from 1995 to 2013.

25. More dynamic import trading relation between APEC & non-APEC economies Lao PDR, Myanmar and Cambodia Imports of ASEAN to APEC generally rising until 2005 (AFTA fully implemented), while share of APEC to ASEAN imports slowed a bit in same period. After ATIGA implementation in 2010, imports of ASEAN to APEC dropped by 25% from 45% in 2009 (mainly due to the US Financial Crisis). It recovered in 2010 but slowed down onwards. Share of APEC’s to ASEAN’s total imports stood at 82% ▫indicating APEC’s exports highly depend on the changes in the demand of the ASEAN market and shocks affecting imports and supply of exports.

26. The above findings suggest that effects of ASEAN regional cooperation on trade concentration with APEC seem restrictive to a few APEC economies but trade has been dispersive in sectors.

27. Thank you