Is Trade in COVID-19 Products in ASEAN Economies a Building or Stumbling Block?

Abstract

Stumbling blocks to regional integration continue to pose a serious threat to the World Trade Organization (WTO), particularly during the COVID-19 pandemic. This study aims to examine the effect of regional economic integration on trade in COVID-19 products for Association of Southeast Asian Nations (ASEAN) countries using quarterly data for 2010–2020. A panel data model is estimated using the Poisson pseudo-maximum likelihood approach to address zero trade values, cross-sectional dependence, and heterogeneity problems. The findings of a case study on bilateral trade in COVID-19 products reveal that the ASEAN regional trade agreement is a stumbling block to the WTO’s rules-based multilateral trading system. The results indicate that the home country’s productive capacity, the host country’s absorptive capacity, the countries’ similarity in size and per capita income, and the countries’ remoteness have positive and significant relationships with trade in COVID-19 products in ASEAN economies. This study provides several policy implications for Southeast Asian countries.