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A New Examination of the Impacts of Regional Trade Agreements on International Trade Patterns

Author

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  • Nguyen, Duc Bao

    (University of Bordeaux, GREThA-UMR CNRS 5113)

Abstract

This paper assesses the ex-post effects on the international trading system of eighteen pluri-lateral regional trade agreements (RTAs) by examining their impacts on intra-bloc trade and on the tendency of members to trade with the rest of the world. This study is based on a gravity model with a solid theoretical foundation involving Anderson and van Wincoop’s (2003) multilateral resistance terms. The model assesses 160 countries over a time period that extends from 1960 to 2014. Making use of the Poisson pseudo maximum likelihood (PPML) estimator and selecting the proper RTA variable and fixed effects settings, our analysis confirms the widespread trade-promoting effects of RTAs with mixed effects on extra-bloc trade. However, trade diversion in terms of bloc exports and imports are detected mostly in American and African trade agreements in many cases. By contrast, export and import creations are more prominent for RTAs in Europe and Asia.

Suggested Citation

  • Nguyen, Duc Bao, 2019. "A New Examination of the Impacts of Regional Trade Agreements on International Trade Patterns," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 34(2), pages 236-279.
    • Handle: RePEc:ris:integr:0770
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    Citations

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    Cited by:

    1. Fabien Candau & Geoffroy Guepie & Reine Kouakou, 2018. "In Gravity no Veritas: Dubious Trade Elasticiy and Weak Effects of Regional Trade Agreements in Africa," Working Papers hal-02625930, HAL.
    2. Dmitriy Aleksandrovich Izotov, 2021. "Trade Integration in the Asia-Pacific Region: Decomposition of Effects," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 66-96.
    3. Bojan Matkovski & Danilo Đokić & Luna Vodana Jović, 2022. "How Cefta Influenced The Competitiveness Of Agri-Food Trade In The Western Balkans," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(235), pages 37-66, October –.
    4. Huria, Sugandha, 2020. "Gains from Free Trade Agreements: A Theoretical Analysis," MPRA Paper 109815, University Library of Munich, Germany.
    5. Koffi Dumor & Yao Li & Ma Yongkai & Enock Mintah Ampaw & Hafez Komla Dumor, 2022. "Evaluating the belt and road initiative effects on trade and migration: Evidence from the East African community," African Development Review, African Development Bank, vol. 34(1), pages 16-28, March.
    6. Juan René Rojas Rodríguez & Xenia Matschke, 2023. "The CAFTA-DR Free Trade Agreement — Analyzing its effects in a modern gravity framework," International Economics and Economic Policy, Springer, vol. 20(1), pages 27-93, February.

    More about this item

    Keywords

    Gravity model; Regional trade agreements; Regional integration; Trade creation; Trade diversion;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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