Commercial Achievements in Concluding Free Trade Agreements between Selected Countries of MENA and ASEAN Block (Case Study: Iran)

One of the main features of global economy is increasing competition of countries for finding new markets. Thus during recent years international trade has devoted the largest part of total trade of many countries to itself. Given the present process of economy which is progressing toward unity, forming regional blocs and unions in the form of concluding bilateral or multilateral cooperation agreements could play a major role in more extensive presence of countries in international competition stage. The main purpose of this paper is to recognize successfulness and contingent unsuccessfulness of concluding free trade agreement between MENA countries and selected members of ASEAN (Indonesia, Malaysia, Philippine, Singapore and Thailand) and to evaluate its effect on Iran's trade flows. To do so generalized gravity model and regression based on generalized method of moments during 1997-2006 was used. Findings indicate that concluding free trade agreement has positive effect on tradeflows of members of MENA and ASEAN bloc as well as Iran and ASEAN and it also shows that tariff implementation has no effect on the amount of exchanges of involved parties.