Under the influence of globalization, trade liberalization and innovative developments in information and logistics technology, global value chains and international specialization have become the primary driving force behind the promotion of regional trade agreements (RTA).Companies in Taiwan import materials and components for production from ASEAN countries and also invest substantially in ASEAN countries.Implementation of the ASEAN 3 free trade area, comprising ASEAN countries plus China, Korea and Japan, will affect the global development of Taiwan’s industries. This study uses the computable general equilibrium (CGE) model, known as the Global Trade Analysis Project (GTAP) model, to evaluate the potential economic impacts on Taiwan's economy of signing or not signing an FTA with ASEAN. Simulation results show that liberalizing trade with ASEAN would offset the marginalization effects of Taiwan's non-participation in the ASEAN 3 FTA by raising both imports and exports and adding US