**18** OECD (2002: 35)

19 Data source is IMF's Direction of<sup>TradeStatistics.Taiwan notincluded.</sup> 20 Table numbers beginning with "S" are<sup>locatedin theStatistical Appendix;those beginningwith "G"are</sup> in the General Appendix.

21 Includes the ASEAN countries plus<sup>China,JapanandSouth Korea.</sup> 22 These three were selected because: (1)<sup>ASEANis themostprominent officialall-East-Asiangroup, (2)</sup> Japan is the only developed country<sup>in the regionand has playeda major rolein tradein the region for the</sup> last two decades, and (3) China has recently<sup>entered the WTOandhas experiencedthe most rapidgrowth</sup> in the region in recent years.

23 Some caution, however, is advised<sup>in interpretingthis data tomean that ASEAN is trading more</sup> intraregionally than extemally with the U.S.<sup>andthe EU.Giventhe shortcomingsof thetrade share</sup> measure, we will reserve judgment<sup>on thisuntilaftera lookat thetradeintensityindex.</sup> 24 Petri (1993) refers to these two measures<sup>as the "absolute"and "relative" measures,respectively,of</sup> regional interdependence. Frankel (1997:<sup>Chapter2) alsodiscussesthesemeasures.</sup>

**2S** The one exception (among the years<sup>includedin thetable) wasin1996 when"AllEastAsia's" share</sup> surpassed that of NAFTA, reflecting<sup>the rapid growth periodin the regionatthat time.</sup> 26 Since data has been calculated<sup>backto 1970 on the basis of currentgroup membership, these increases</sup> would not reflect the actual addition<sup>of members.</sup>

**27** This is clearly reflected in Tables 3<sup>and 4 whereAPEC with its 21membersand large-volume traders,</sup> such as Hong Kong, Singapore, Japan<sup>and theU.S.,has a larger sharein bothworld andits own trade than</sup> does NAFTA, which includes only<sup>threemembers of whichoneis the U.S.,or ASEANwith10relatively</sup> small traders.

28 For example, referring back to Table<sup>2,Hong Kong's tradewith ASEANisonly 8 percent of itstotal</sup> trade (average for 1998 to 2000) but<sup>itstrade with APEC isover82 percent,which does not necessarily</sup> mean that it trades more intensively<sup>withthe countriesof APEC than with the countries of ASEAN but</sup> rather that there are more and larger<sup>tradingcountriesin the APEC group than thereareinASEAN.[See</sup> Frankel (1997) for further discussion<sup>of this topic.]</sup> 29 See Drysdale and Gamaut (1993)<sup>foreven more in-depth analysisof tradeusing other indices including</sup> the complementarity and bias indices.

30 This is done by adjusting the trade<sup>sharesof acountry/groupthroughsome measureof that</sup> country's/group's importance in world<sup>trade.Morespecifically,it isthe "ratioof the shareof a country's</sup> exports with another country to the<sup>shareof thatother countryin worldimports.A numbergreater than</sup> one indicates that a country exports to<sup>anothercountry at a greaterlevel than theother is importing from the</sup> rest of the world, and a more 'intense'<sup>bilateraltrading relationship."(DeBrouwer2002: 290 and 292)</sup> There are a number of variations of<sup>this index including the"double-relative" measure of Petri (1993)and</sup> the "corrected concentration ratio" of<sup>Frankel (1997).The ratio usedhere is that presented in Drysdaleand</sup> Garnaut (1993), Anderson and Norheim<sup>(1993), and DeBrouwer (2002). Thereareotherswho have also</sup> used similar versions of the index; e.g.,<sup>Yamazawa,Hirata,andYokota (1991),Goto and Hamada(1994),</sup> and Goto and Kawai (2001). Rajan and<sup>Sen (2002)alsocalculatethisratiofor imports,in additionto</sup> exports.

31 The same formula was used to calculate<sup>the indexin bothtables buttheremay be slightdifferencesin</sup> raw data used in the calculations as<sup>they weredrawn fromsomewhat different sources.The results,</sup> however, are largely comparable.

32 For example, China's index with<sup>Japan in1995-97 was 2.8andthis remained unchangedin1998-2000;</sup> however, Japan was in second position<sup>as apartner for Chinain theearlier periodbut inthird positionin</sup> the latter period.

33 That analysis showed that from 1990<sup>(from at least1980in the case of exports) tothe end of the decade</sup> ASEAN's trade with Japan. as a share<sup>of ASEAN'stotal tradehad declined.(SeeFigure1.)</sup> 34 Excluding Myanmar and Brunei, which<sup>werenotincludedin the1995-97study.</sup> 35 These findings are generally confirmed<sup>by other studies,somecoveringdifferent timeframes.For</sup> example, see Frankel (1997: 29) and<sup>Goto and Kawai(2001:7).Urata (2002)concurs basedon his analysis</sup> of the "absolute", "relative", and "double-relative"<sup>(whichis calculateddifferently thantheintensity index</sup> used in this paper but is still comparable)<sup>measures.</sup> 121