5. How should a U.S. firm that currently only exports to ASEAN countries respond to the creation of a single market in this regional grouping?
Answer: A U.S. firm that is currently only exporting to ASEAN markets should seriously consider opening a facility somewhere within the region, as the economics of a common market suggest that outsiders can be at a disadvantage relative to insiders. The opening of borders within a common market has the potential to increase the size of the market for the firm. Of course it is possible, after careful consideration, that exporting may still be the most appropriate means of serving the market in some situations.