Regional Trade Agreements and Enterprises in Southeast Asia

This paper undertakes a comparative and firm-level analysis of the impact of regional trade agreements (RTAs) in Indonesia, Malaysia and the Philippines. It finds that firm-heterogeneity matters in RTA use. Acquiring knowledge about RTAs, building technological capabilities, and membership of industrial clusters affect the likelihood of RTA use at firm-level. A lack of information about RTAs and the absence of RTAs with major trading partners explain non-use of RTAs. Key policy implications include the need to improve business support for RTAs, to conclude RTAs with major trading partners, and to create a database on preference use in RTAs.