The Impact of the International Tripartite Rubber Organization (ITRO): Sub-Regional Level Analysis

Abstract

This study chooses natural rubber for two reasons, (1) the Southeast Asian countries that had established this organization (Thailand, Indonesia, and Malaysia) are the world’s main producers of natural rubber and controls up to 65 percent of its share. (2) Natural rubber is among one of the top 11 priority products in the AEC. This chapter discusses about the ITRO (International Tripartite Rubber Organization)’s role to increase FDI inflows as a proxy for trade and investment integration in Southeast Asia especially to Indonesia, Malaysia, and Thailand as the ASEAN members that control the natural rubber production in the world. The main reason for using this cooperation as an indicator for assessing the sub-regional cooperation within limited ASEAN member states is because this cooperation is more practical given its specification on particular product cooperation compared with other sub-regional forms in Southeast Asia without a specific product to be managed such as the Indonesia Malaysia Thailand Growth Triangle, Singapore Johor Riau, and Brunei Indonesia Malaysia Philippines East ASEAN Growth Area. The organization and the product that is being managed is clear, and is managed in a well-established regulation for both production and trading aspects. This organization is essential to be adopted as the mean to assess ASEAN’s sub-regional economic cooperation since it was established by limited members of ASEAN: Indonesia, Malaysia, and Thailand, which are the selected observed ASEAN members in this study.