Theory vs practice: Patterns of the ASEAN-10 agri-food trade

Abstract

During the past decades, agricultural trade is enormously expanded. One of its driving factors is the World Trade Organization. However, regional agreements can give further trade opportunities for the participating countries. Association of Southeast Asian Nations (ASEAN) is one of them. This article aims to give a detailed overview of ASEAN members’ agri-food trade by using the world and regional level data. The country level competitiveness is calculated by four different Balassa-type indices and highlights whether the agri-food trade (practice) of these countries is in line with the revealed comparative advantages/competitiveness of the different product groups (theory). According to the results, commodities with the highest comparative advantages overlap with the most important export products. This confirms a tight connection between theory and practice. It should also be noted that world level values are generally higher than that of the regional levels. Moreover, countries with significant agri-food production (Thailand, Indonesia, Vietnam, and Malaysia) can be characterized by higher comparative advantages compared to the other ASEAN member states. These results can help to better understand these countries’ trade specialization and international trade performance.

Keywords

• regional cooperation
• regional agreement
• extra- and intra-trade
• balassa indices