This study investigates the effects of ASEAN Free Trade Area (AFTA) agreement on the bilateral manufacturing trade between the 10 member countries of ASEAN and 39 of their trading partners. The period ofstudy covers 1995 to 2014. Results obtained from panel data analysis of the gravity model with random effectsshow that the economic sizes, populations, relative endowments, common language and geographical factors like distance, island, landlocked and neighbour are significant determinants of the bilateral manufacturing trade for ASEAN member countries. Moreover, results obtained from the fixed effects model in this study suggests that AFTA has generatedpure trade creation effects in terms of exports. Ontop of that, AFTA has resulted in larger magnitude of trade creation effects in imports than import diversion effects. Overall, AFTA promotes trades among ASEAN member countries through the elimination of tariff and non-tariff barriers, for bringing aboutpure trade creation effects in terms of exports as well as imports and also trade diversion effects in terms of imports. In sum, this study with more recent data set covering more ASEAN trading partners shows empirical evidence to justify the success of AFTA arrangement.

This article adopts the augmented versions of the Gravity Model to examine the effects of the signing of the ASEAN-China Free Trade Agreement (ACFTA) on the bilateral aggregate trades. Specifically, ACFTA dummy variables are incorporated in the basic model is to estimate the direction and magnitude of the ACFTA effects. A total of 79 trading partners of ASEAN member countries plus China were examined in this article. The study finds that the Gross Domestic Product, population, natural endowment, distance, and common language are the main determining factors of the bilateral trade for ASEAN member countries and their trading partners. Estimated results from this Augmented Gravity Model showed that ACFTA had increased the bilateral aggregate trades not only between intra-bloc member countries but also intra-bloc and extra-bloc countries. With this positive finding, ASEAN and China could consider expanding their free trade area to a broader regional perspective, enhancing economic growth and reducing regional inequality.