Economic Integration of the EU and ASEAN

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This paper examines whether regional economic integration of ASEAN and the EU has increased their respective intra-regional trade; and to verify whether the economies of ASEAN and the EU are natural trading partners themselves or not. Using the frameworks of regional trade intensity and trade complementarity indices; the findings indicate that economic integration of the EU and ASEAN seems beneficial for member economies in terms of trade as evidenced by the higher regional trade intensity indices. In terms of trade complementarity; there exists higher trade complementarity between the EU 15 and lesser trade complementarity among the last entrants. The same is true for the ASEAN; where greater trade complementarity is observed among the ASEAN-5. The paper thus concludes that trade complementarity among members of any regional trading bloc is necessary to achieve a closer economic integration.