LOS BAÑOS, Laguna — A new study published in the Agriculture and Development Notes (ADN) of the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) reveals that the ASEAN-China Free Trade Agreement (ACFTA) has brought significant growth to regional trade, but its benefits for agriculture are unevenly distributed across Southeast Asian countries.
The study titled "Trade Creation or Diversion? Assessing the ASEAN-China Free Trade Agreement's Uneven Impact on ASEAN Agricultural Trade" stated that while total trade between member-states of the Association of Southeast Asian Nations (ASEAN) and China has increased four-fold since the ACFTA-Agreement on Trade in Goods took effect in 2004, trade in agricultural commodities has grown nearly fivefold from $14 billion in 2004 to $68 billion in 2018.
However, the study said that the gains are concentrated in a few countries, with Vietnam emerging as the primary beneficiary, achieving "unparalleled" success with significantly higher agricultural trade within ASEAN alongside strong growth in exports and imports globally.
Indonesia and Thailand also recorded substantial net trade creation, while Malaysia and the Philippines increased their agricultural trade mainly by exporting to markets outside the ACFTA bloc. In contrast, Brunei Darussalam, Cambodia, Lao PDR, and Myanmar experienced net trade diversion effects.
To replicate Vietnam's success and fully harness the benefits of free trade, the authors stress the need for ASEAN member-states to adopt a comprehensive policy framework, including investments in technology such as mechanization, infrastructure such as farm-to-market roads and irrigation systems, and human capital through training and extension services.
A national agriculture blueprint is crucial for research, development, and evidence-based regulations, according to the study, concluding that agriculture authorities should treat free trade agreements (FTAs) as strategic policy tools for sectoral expansion.
With a clear agriculture policy framework — backed by initiatives, such as SEARCA's Seed Fund for Research and Training (SFRT), which links research to practical pathways for growth, the study added that countries can create an enabling environment to respond to structural changes and seize new opportunities in foreign markets.
The study was co-authored by Paul Neilmer Feliciano, a program manager and economist at the Ateneo Policy Center, and Manuel Leonard Albis, an assistant professor at the University of the Philippines School of Statistics.
ADN publication draws on research supported by SEARCA's SFRT. This grant program provides startup funds for projects that advance agricultural and rural development in the region.