Development Gaps in the ASEAN : A Comparison of the ASEAN6 and CLMN Using Gravity Models of Trade

With full integration still not realized beyond the December 2015 deadline for the broad implementation of the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC), this study provides an analysis of the factors that affect intra-ASEAN trade, particularly comparing the ASEAN6 (Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand) and the newer CLMV (Cambodia, Lao People's Democratic Republic, and Vietnam) member nations. Comparative analysis of the trends in imports, exports, and total trade among the ASEAN member states, coupled with the use of augmented gravity models of trade, show that there are disparities between the two blocs in terms of output, population, real exchange rates, non-tariff barriers, and trade flows. In addition, alongside the usual trade attractors and barriers, trading times and requirements as well as CLMV membership significantly affect changes in trade values. These results imply possible policy directions in line with closing development gaps between the two blocs considering AEC key strategic areas of action