SEARCA notes uneven farm gains from ASEAN-China FTA

LOS BANOS, Laguna — A new issue of the Agriculture and Development Notes (ADN) series from the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) says the ASEAN-China Free Trade Agreement (ACFTA) has significantly expanded regional commerce, but the agreement’s benefits for agricultural trade have been uneven across Southeast Asian countries.

In the ADN titled “Trade Creation or Diversion? Assessing the ASEAN-China Free Trade Agreement’s Uneven Impact on ASEAN Agricultural Trade,” SEARCA said the analysis shows overall trade growth since the deal’s goods provisions took effect, while warning that some member states have experienced trade diversion rather than broad-based gains.

The ADN is co-authored by Mr. Paul Neilmer Feliciano, a program manager and economist at the Ateneo Policy Center, and Mr. Manuel Leonard Albis, an assistant professor at the University of the Philippines School of Statistics, according to SEARCA.

SEARCA said the publication draws on research supported by its Seed Fund for Research and Training (SFRT), which it described as a grant program providing start-up funds for projects that advance agricultural and rural development in the region.

The researchers found that since the ACFTA-Agreement on Trade in Goods (ATIG) took effect in 2004, total trade between ASEAN and the People’s Republic of China (PRC) has increased fourfold, SEARCA said.

Over the same period, trade in agricultural commodities between ASEAN and the PRC grew nearly fivefold, according to the ADN summary released by SEARCA.

Despite these headline figures, SEARCA said the study found that the gains have been concentrated in only a few countries, reinforcing long-running concerns among some policymakers and farm groups that trade liberalization can widen competitiveness gaps without parallel investments in production and logistics.

Vietnam emerged as the primary beneficiary of the agreement’s agricultural effects, SEARCA said, citing the authors’ assessment that the country achieved “unparalleled” success.

SEARCA said the study describes Vietnam’s performance as featuring significantly higher agricultural trade within ASEAN, alongside strong growth in exports to and imports from the rest of the world.

Indonesia and Thailand also recorded substantial net trade creation, the study found, according to SEARCA’s summary of the ADN.

By contrast, SEARCA said Malaysia and the Philippines increased their agricultural trade mainly by exporting to markets outside the ACFTA bloc, suggesting that their strongest expansion did not primarily come from deeper integration with China and ASEAN partners under the agreement.

SEARCA said Brunei Darussalam, Cambodia, Lao PDR, and Myanmar experienced net trade diversion effects, indicating that, for these countries, trade may have shifted in ways that reduced the net gains expected from tariff preferences.

Trade creation generally refers to new commerce generated because lower barriers make suppliers within the free trade area more competitive, while trade diversion describes a shift away from potentially lower-cost global suppliers toward partners inside the bloc because of preferential treatment.

The ADN’s findings arrive as ASEAN economies continue to recalibrate their agriculture strategies amid cost pressures, climate-related disruptions, and recurring debates over how to balance food security with export competitiveness.

To replicate Vietnam’s success and fully harness the benefits of free trade, Feliciano and Albis called on ASEAN Member States to adopt what they described as a comprehensive policy framework, SEARCA said.

SEARCA said the authors recommend targeted investments in technology, including mechanization, to raise farm productivity and help local producers meet quality and volume requirements in more competitive regional markets.

The authors also pointed to infrastructure priorities such as farm-to-market roads and irrigation systems, SEARCA said, arguing that logistics and water management remain critical bottlenecks that can prevent farmers and agribusinesses from taking advantage of wider market access.

In addition, SEARCA said the authors stressed training and extension services to strengthen human capital, reflecting the view that improved on-farm practices and better dissemination of research are necessary to translate trade openings into sustained income gains.

The ADN also underscored the importance of a national agriculture blueprint that provides an overarching strategy for research, development, and evidence-based regulations, SEARCA said.

Such a blueprint, the authors argue, can help align public and private investment, prioritize value chains with comparative advantage, and create clearer rules that support compliance, food safety, and market credibility.

The study concludes that agriculture authorities should treat free trade agreements as strategic policy tools for sectoral expansion, rather than assuming tariff reductions alone will deliver broad gains, SEARCA said.

With a clear agriculture policy framework, SEARCA said, countries can create an enabling environment to respond to structural changes and seize new opportunities in foreign markets.

SEARCA also highlighted the role of initiatives such as its SFRT, which it said links research to practical pathways for growth, as part of the broader ecosystem needed to translate academic findings into actionable reforms.

For the Philippines, the ADN’s conclusion that agricultural trade growth has been driven mainly by exports beyond the ACFTA bloc could add urgency to discussions on strengthening productivity, lowering logistics costs, and improving trade facilitation to compete more effectively in preferential markets.

For smaller ASEAN economies flagged as experiencing net trade diversion, the findings may reinforce the importance of niche strategies, targeted upgrading, and regional cooperation to ensure local producers are not sidelined as trade flows deepen among more competitive suppliers.

SEARCA said the ADN is intended to contribute to policy and public discussion by providing research-based insights on agriculture and rural development challenges affecting Southeast Asia.