Who Uses Free Trade Agreements?

It is noted that utilisation of ASEAN Free Trade Agreements (FTAs) is low by international standards. In order to clarify the reasons for such low utilization, this paper investigates what kinds of Japanese affiliates in ASEAN are more likely to use FTAs in their exporting, by employing unique affiliate-level data.

Our findings are as follows. First, the larger the affiliate is, or the more diversified the origins of its procurements, the more likely it is to utilise an FTA scheme in its exporting. Second, affiliates that export actively to countries with higher general tariffs are more likely to use FTAs. Third, there are clear differences in FTA utilisation depending affiliates' locations and sectors.

ERIA-DP-2009-22.pdf