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Is the Growth of Regionalism as Significant as the Headlines Suggest? Lessons from Agricultural Trade

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  • Grant, Jason H.

Abstract

The proliferation of regional trade agreements (RTAs) has motivated a significant number of ex post econometric studies investigating their agricultural trade impacts. The general conclusion is that RTAs increase members’ trade by as much as 150 percent, on average. In this article, we demonstrate that previous empirical work likely misrepresents the impact of RTAs because of considerable heterogeneity in the depth of economic integration pursued by these agreements. Contrary to previous studies, the results reveal that RTAs are not universally trade creating, and some agreements appear to provide very little benefit. “Deep integration agreements”, on the other hand, are largely responsible for the impressive agricultural trade flow increases reported in the literature. Testing the hierarchy of RTAs largely confirms the theory: the benefits of regionalism are an increasing function of the depth of economic integration.

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Bibliographic Info

Paper provided by Canadian Agricultural Trade Policy Research Network in its series Trade Policy Briefs with number 145970.

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Date of creation: Dec 2012
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Handle: RePEc:ags:catptp:145970

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Web page: http://www.catrade.org/
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Related research

Keywords: regionalism trade agricultural; Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; International Development; International Relations/Trade;

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Cited by:
  1. Whalley, John, 2013. "Regional Agreements: A Stocktaking Based on WTO Notifications," Commissioned Papers 156228, Canadian Agricultural Trade Policy Research Network.

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