Regional market integration, Covid-19, and agricultural trade performance in Southeast Asia

Jamhari Jamhari, Gilang Wirakusuma, Agus Dwi Nugroho and Zoltan Lakner

Abstract: Regional Market Integrations (RMIs) are becoming increasingly popular globally, especially in Asia. RMIs have many advantages for the participants. However, RMIs improve inter-country dependency and are vulnerable to external shocks. The Covid-19 pandemic is now disrupting human life, including agricultural trade between countries. This situation encouraged us to compare RMIs’ positive impact with Covid-19’s negative impact. This study investigates the impact of RMI and Covid-19 pandemic on SEA’s agricultural trade and measures its competitiveness corresponding to them. The sample of this study is the SEA region which is among the world’s highest-growing RMIs. We employed secondary data derived from ASEANStats for 2012-2020 periods on HS01-HS24 commodities. General short-term export-import patterns, Revealed Comparative Advantage, and Trade Specialization Index were used to denote trade performance. We present evidence that the ASEAN Economic Community, which represents RMIs, generally increases agricultural commodity trading patterns and competitiveness. However, the benefits generated by the RMI were undermined by the Covid-19 pandemic which had a tremendous impact on the trade performance of ASEAN countries. In order to accelerate RMI and ease the negative impact of Covid-19, we recommend three strategies in the form of capacity building, technology implementation, and improvement of the market situation.

Keywords: agricultural trade; ASEAN Economic Community; competitiveness; Covid-19

Date published: 2021-12-15