Journal of International Business and Economics

Utilisation Rate of Free Trade Agreements (FTAs) by Local Micro-, Small- and Medium-Sized Enterprises: A Story of ASEAN
Tulus Tambunan, Alexander C. Chandra

Abstract
The Member States of the Association of Southeast Asian Nations (ASEAN) are not only progressing in the deepening of economic integration among themselves, but are also active in pursuing free trade agreements (FTAs) with their strategic economic partners (SEPs). It is generally expected that the implementation of all existing ASEAN-led FTAs will provides benefits to all enterprises in individual ASEAN member states (AMS) in the forms of greater export opportunities and greater availability of raw materials, intermediate inputs and capital goods with competitive prices and better quality. However, there are concerns over the extent to which MSMEs in individual AMS have benefited from these commercial pacts. Although literature on this issue is limited, available evidence suggests that MSMEs are by far the least active economic actors in the region to make use of such trade agreements. Aside from identifying key challenges and opportunities confronted by ASEAN-based MSMEs in taking advantage of ASEAN-led FTAs, this article also provides practical and policy recommendations that could allow the greater use of these FTAs by these enterprises.

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