The Impact of Regional Trade Agreements in the Intra Central and East Asian Trade.

Internationalization of trade leads the countries and the policy makers to consider, negotiate, conduct and apply Free Trade Agreements with other countries in order to open their trade market. Main motivation is the reduction of costs and barriers and the goods promotion in more markets. Asian neighbor countries make regional trade agreements as they have common cultural elements as the language, borders and short distances. In this paper, we examine if the differences of the economies have also positive impact on the Asian trade, under the umbrella of the BTAs. By using the famous for the international trade, gravity model, we prove empirically how exchange rates volatility risk, differences in WTO membership and differences of GDP and population affect the exports of the Asian BTAs contractors. We find that exchange rates volatility is insignificantly positive as the policy makers have adopted protection measures and WTO membership for both counterparts promotes and secures the bilateral free trade