Utilisation of Free Trade Agreements by Services Industries in ASEAN

Ikumo Isono and Yoshifumi Fukunaga

from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: In this paper, we investigate the utilisation of free trade agreements (FTAs) by services industries in eight member countries of the Association of Southeast Asian Nations (ASEAN). Using original survey data, we examine, in particular, the linkage between the trade in goods, rather than the trade in services, of services companies and their utilisation of FTAs. Our findings are as follows. First, a slight majority of services firms engaged in direct imports use FTA Certificates of Origin (COOs). Second, firms often use FTAs without recognising what these are due to lack of understanding of the legal meaning of COOs. Amongst services firms utilising FTAs, the ASEAN Trade in Goods Agreement and the ASEAN-China Free Trade Agreement are the most popular. Third, ‘lack of information’ and ‘small trade volume’ are the two main reasons cited by services firms for not using FTAs. Fourth, 70 percent of firms claim that information on FTAs is either poor or very poor. Last, only 10 percent of firms consider FTAs as a factor to be taken into account in making decisions on their investment locations.

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Persistent link: https://EconPapers.repec.org/RePEc:era:chaptr:2013-rpr-05-02

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