Impact Of Asean On Members Welfare Samples †MyAssignmenthelp.com

Question: Discuss about the Impact Of Asean On Members Welfare Singapore. Answer: Free and global trade is possible between any two countries or with a block of countries and such trade results into both positive and negative impacts on the welfare of each nation involved in the trade. Australian trading relation with ASEAN countries has great impact on the welfare of Singapore as a member as well as the whole trading bloc (Kepaptsoglou, Karlaftis and Tsamboulas 2010). Even though the trade relation has impacted Singapore as well as other members of the block positively and negatively, the positive impact on the welfare on the members overweigh the negative impact. The positive consequence of the ASEAN trading community can be justified through the application of dynamic computable general equilibrium model known as the CGE. The assessment done quantitatively in the recent past on the impact of the trade on the welfare indicated free trade flows and sectoral output. The positive impact from the trade arises when the trade barriers are removed and favorable policies created by nations (Kepaptsoglou, Karlaftis and Tsamboulas 2010). The removal and creation of favorable policies by Singapore and Australia has resulted into an increased productivity within the nation and in the year 2015, welfare gains from the ranged from 1.1% in Indonesia and 9.4 5 in Thailand. This result indicate the importance of increased competition and infrastructure in international trade. Based on this theory Singapore as a member of the trading bloc has improved in terms of infrastructure in order enjoy more benefit in the trade. The comparative advantage of a given trading partner determines how the nation will gain from the trade, the higher the GDP the higher the gain from the trade, Singapore GDP has improved as a result of the trade and the nation is currently benefiting more from the trade. The trade has increased the rate of employment in Singapore as well as in the other member nations the free trade improved production where labor is an input (Okabe and Urata 2014). Even though the positive side of the trade overweighs the negative impact on the welfare of specific groups in Singapore. As result of the free trade Singapore has poor income distribution among its citizens. In conclusion, ASEAN has resulted in to greater achievement in Singapore compared to its negative impacts on the countrys welfare. References Kepaptsoglou, K, M.G. Karlaftis and D. Tsamboulas 2010 'The Gravity Model Specification for Modeling International Trade Flows and Free Trade Agreement Effects: A 10-Year Review of Empirical Studies', The Open Econom-ics Journal 3: 1-13. Okabe, M. and Urata, S. 2014 'The impact of AFTA on intra-AFTA trade', Journal of Asian Economics, vol. 35, pp. 12.