ABSTRACT
213Nowadays, trade imbalances or inequality has become an important issue on international trade. Different competitive advantages among countries tend to widen trade inequality in region such as ASEAN. This study tries to analyze and identify Indonesia’s competitive products relative to its peers in ASEAN and its correlation with regional trade inequality in ASEAN. It employs Revealed Competitive Advantage (RCA) method in order to identify product competitiveness and Williamson Index for calculating regional trade inequality. The results show that product competitiveness has an impact on regional trade inequality in ASEAN. However, implementation of local currency settlement framework among Indonesia, Malaysia, and Thailand on trade seems to be positive for export and import growths and therefore might reduce trade inequality. As an implication, the framework could be extended to other countries in ASEAN.
