PUBLICATIONS & REPORTS

Contents Introduction

We investigated recent trends and patterns of intra-regional trade, focusing on the automobile and automobile parts industries in the ASEAN-4 countries. Looking at the intra-ASEAN auto parts trade in detail, we found that although the Grubel-Lloyd intra-industry trade (IIT) index showed a steady trend in the ASEAN region and other regions, the level of the index is considerably lower in ASEAN than in NAFTA and MERCOSUR. On the other hand, vertical IIT showed a rapid increase while horizontal IIT remained at a very low level in ASEAN, which is one of the conspicuous characteristics for the region. Moreover, we found that Thailand was the largest exporter and importer of automobile parts in ASEAN and that engines and engine parts were the major components traded among the ASEAN-4 countries. Most intra-industry trade in the region, however, was concentrated in miscellaneous automobile parts.

Our econometric investigation on the determinants of IIT revealed that for the AFTA countries, increasing market size, the decreasing difference in market size, and the increasing size of the automotive industry were major sources of IIT growth. However, the estimated coefficients on the AFTA dummy were not significant in many of the equations, suggesting that the regional FTA has not contributed to IIT growth in the AFTA countries