The Impact of AEC Trade Facilitation Improvement on Thailand's Goods in Transit and Inter-state Trade

Abstract

This paper studies the effect of improvement in trade facilitation according to ASEAN Economic Community (AEC) on cross-border freight and trans-border trade of Thailand. To do so, we collect trade facilitation and trade performance at 10 border checkpoints of Thailand and construct the augmented gravity model to see the relationship between trade facilitation and trade performance at the border checkpoints of Thailand.This paper studies the effect of improvement in trade facilitation according to ASEAN Economic Community (AEC) on cross-border freight and trans-border trade of Thailand. To do so, we collect trade facilitation and trade performance at 10 border checkpoints of Thailand and construct the augmented gravity model to see the relationship between trade facilitation and trade performance at the border checkpoints of Thailand. The findings show that the implementation of ASEAN Framework Agreement on the facilitation of goods in transit and inter-state transit will improve the export values at the border locations of Thailand. If only ASEAN Single Window (ASW) is implemented, the exports passing all border locations of Thailand will increase 308.88 million bahts. If the EDI system is installed in all neighboring countries, an increase in exports will be 723.97 million bahts. Furthermore, if the CLM countries can reduce the time spent in their customs procedures for one hour, the export values at all border locations of Thailand will rise by 1,029.33 million bahts without the implementation of EDI system in the mentioned countries and 4,109.92 million bahts with the implementation of EDI system.