The Growth Effects of Services Trade Liberalization in ASEAN

The effects of liberalization in services trade in ASEAN countries are investigated using regression analysis and a constructed measure of reform in the services sectors of ASEAN-5. It is found that the openness index measuring the level of liberalization in financial services sector through the ASEAN Framework Agreement on Services (AFAS) and the General Agreement on Trade in Services (GATS) is significant in affecting the rate of economic growth amongst five member countries of ASEAN. However, it has not been possible to isolate the effects of AFAS from those GATS because there has been little difference in the commitments contained in each of them. Moreover, as GATS came into being in 1995 and AFAS two years later, there is insufficient data to measure the effects of each Agreement separately.