THE ASEAN FREE-TRADE AREA - IMPLICATIONS FOR INDONESIA IMPORTS

The Singapore Declaration of 1992, announcing the establishment of an ASEAN Free Trade Area (AFTA), effectively brings down tariff levels on intra-ASEAN trade to 0-5% by the year 2008. This paper estimates the changes in Inonesia's imports that will result from trade creation generated by AFTA. Our results show that Indonesia's imports from other ASEAN partners will increase by 6%, based on 1990 figures. This is far greater than the estimated effects of the existing PTA scheme. However, these results are upper-bound estimates and include only static changes.