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Consequence of Regional Trade Agreements to Developing Countries

Author

Listed:
  • MacPhee, Craig R.

    (University of Nebraska-Lincoln)

  • Sattayanuwat, Wanasin

    (Srinakharinwirot University)

Abstract

We investigate the effects of 12 major Regional Trade Agreements (RTAs) on intraand extra-regional trade flows in member developing countries, both intra-RTA trade and the effect of RTAs on non-member trade over 1981~2008. We address and resolve statistical problems caused by logarithms, zero observations, and heteroskedasticity. Our regression results are not favorable to regional integration as a substitute for multilateral trade liberalization, although there are exceptions. Several RTAs fail to generate intrabloc trade creation. Seven of the 12 RTAs generate import trade diversion while most of the extra-bloc export dummies are not statistically significant. However, three of the five African RTAs in the sample increased intra-bloc trade. The differences in RTA performances are related to their implementation policies.

Suggested Citation

  • MacPhee, Craig R. & Sattayanuwat, Wanasin, 2014. "Consequence of Regional Trade Agreements to Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 64-94.
    • Handle: RePEc:ris:integr:0622
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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. Laurent Didier, 2015. "Accord tripartite de libre-échange COMESA-SADC-CAE," Post-Print hal-03546546, HAL.
    3. Vinko Zaninoviæ, 2022. "The intra-industry trade dynamics in CEE countries: The role of trade agreements," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 40(1), pages 129-145.
    4. Roesmara Donna, Duddy & Widodo, Tri & Adiningsih, Sri, 2018. "Do RTAs Increase Bilateral Trade in the MENA Region?," MPRA Paper 85254, University Library of Munich, Germany.
    5. Kis, Katalin, 2017. "A Kelet-afrikai Közösség belső kereskedelmére ható tényezők [Factors determining the intra-regional trade of the East African Community]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 943-969.
    6. Sattayanuwat, Wanasin, 2015. "RCEP – Thailand Trade Creation and Trade Diversion: Evidence and Analysis," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205432, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Regional Trade Agreements; Gravity Models; Developing Countries;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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