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How Much Do Free Trade Agreements Reduce Impediments to Trade?

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  • Kazunobu Hayakawa
  • Fukunari Kimura

Abstract

This paper empirically investigates how far free trade agreements (FTAs) successfully lower tariff rates and non-tariff barriers (NTBs) for manufacturing industries by employing the bilateral tariff and NTB data in time series for countries in the world. We find that FTAs under GATT Article XXIV and the Enabling Clause are associated with the 2.0 and 1.5 % lower tariff rates, respectively. In the case of NTBs, on the other hand, their respective effects are 2.1 and 2.4 %. Also, compared with these effects of FTAs, WTO membership does not have large effects on tariff rates but does have them on NTBs. These results provide important implication for the literature on the numerical assessment of FTAs. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, vol. 26(4), pages 711-729, September.
    • Handle: RePEc:kap:openec:v:26:y:2015:i:4:p:711-729
    DOI: 10.1007/s11079-014-9332-x
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    Cited by:

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    4. Fiankor, Dela-Dem Doe & Ehrich, Malte & Brümmer, Bernhard, 2016. "EU-African Regional Trade Agreements as a Development Tool to Reduce EU Border Rejections," GlobalFood Discussion Papers 244352, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    5. Svetlov, Nikolai (Светов, Николай) & Shishkina, Ekaterina (Шишкина, Екатерина), 2016. "Economic and Mathematical Modeling of EAEC Agri-food Policy [Экономико-Математическое Моделирование Агро- Продовольственной Политики Еаэс]," Working Papers 767, Russian Presidential Academy of National Economy and Public Administration.
    6. Timini, Jacopo & Conesa, Marina, 2019. "Chinese Exports and Non-Tariff Measures: Testing for Heterogeneous Effects at the Product Level," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 34(2), pages 327-345.
    7. Satoru Kumagai & Toshitaka Gokan & Kenmei Tsubota & Ikumo Isono & Kazunobu Hayakawa, 2021. "Economic Impacts of the US–China Trade War on the Asian Economy: An Applied Analysis of IDE-GSM," Journal of Asian Economic Integration, , vol. 3(2), pages 127-143, September.
    8. Aruna Gounder & Rod Falvey & Gulasekaran Rajaguru, 2019. "The Effects of Preferential Trade Agreements on Foreign Direct Investment: Evidence from the African Caribbean Pacific Region," Open Economies Review, Springer, vol. 30(4), pages 695-717, September.
    9. Russel Kingshott & Piyush Sharma & Peter Hosie & Nebojsa Davcik, 2019. "Interactive impact of ethnic distance and cultural familiarity on the perceived effects of free trade agreements," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 135-160, March.
    10. Tareg Ghazi Alghabbabsheh & Saleh Saud AlSaif & Md Saiful Islam & Tareq Saeed AlShammari & Ali M A Mahmoud, 2022. "Have Bilateral Free Trade Agreements (BFTAs) been beneficial? Lessons learned from 11 U.S. BFTAs between 1992 and 2017," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-21, April.
    11. Dr. Caroline Ntara, 2022. "What Does Africa Stand to Gain from the African Continental Free Trade Area?," International Journal of Science and Business, IJSAB International, vol. 16(1), pages 69-90.
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    13. Ken Itakura, . "Assessing the Economic Effects of the Regional Comprehensive Economic Partnership on ASEAN Member States," Chapters, in: Lili Yan Ing (ed.), East Asian Integration (First Edition), chapter 1, pages 1-24, Economic Research Institute for ASEAN and East Asia (ERIA).

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    More about this item

    Keywords

    Tariff rates; Non-tariff barriers; Free Trade Agreement; World Trade Organization; Simulation; F10; F13; F15;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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