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Trade in the Triad: How Easy is the Access to Large Markets?

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Author Info
Fontagne, Lionel
Mayer, Thierry
Zignago, Soledad

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Abstract

We identify in this Paper the level of trade integration between the three largest economic powers of the world, often called the Triad: The United States, the EU and Japan. We focus on measuring possible asymmetries in market access between members of the Triad using border effects between each of those partners. We investigate trends of bilateral trade openness and show notably that there has been a deterioration of the relative access of Japanese exporters on both the American and EU markets in the 1990s. Results also show which industries have the most asymmetric market access among the different combinations of those partners. We finally provide explanations for the estimated border effects using proxies for bilateral observed protection (tariffs and NTBs), home bias of consumers, product differentiation and levels of FDI. Tariffs still matter in shaping trade patterns even in cases where those tariffs are low in magnitude. The explanations related to actual protection, home bias and substitutability of goods put together explain a large part of the border effect between blocs of the triad, although they do not explain the whole of the border effect puzzle.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4442.

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Date of creation: Jun 2004
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Handle: RePEc:cpr:ceprdp:4442

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Related research
Keywords: border effects european union gravity japan market access triad united states

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration

References listed on IDEAS
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    Other versions:
  4. Huiwen Lai & Daniel Trefler, 2002. "The Gains from Trade with Monopolistic Competition: Specification, Estimation, and Mis-Specification," NBER Working Papers 9169, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Maurice Obstfeld, 2006. "Exchange Rates and Adjustment: Perspectives from the New Open Economy Macroeconomics," Center for International and Development Economics Research, Working Paper Series 1022, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley. [Downloadable!]
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  8. Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2002. "Eliminating Excessive Tariffs on Exports of Least Developed Countries," World Bank Economic Review, Oxford University Press, vol. 16(1), pages 1-21, June.
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  9. James Harrigan & Rohit Vanjani, 2003. "Is Japan's Trade (still) Different?," NBER Working Papers 10058, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Scott Bradford, 2003. "Paying the Price: Final Goods Protection in OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 24-37, November. [Downloadable!] (restricted)
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  13. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June. [Downloadable!] (restricted)
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  14. Chen, Natalie, 2002. "Intra-national versus International Trade in the European Union: Why do National Borders Matter?," CEPR Discussion Papers 3407, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  15. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September. [Downloadable!] (restricted)
  16. Keith Head & Thierry Mayer, 2001. "Effet frontiere, integration economique et "Forteresse Europe"," Working Papers 2001-06, CEPII research center. [Downloadable!]
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  18. repec:att:wimass:199713 is not listed on IDEAS
  19. Lionel Fontagne & Friedrich von Kirchbach & Mondher Mimouni, 2001. "A First Assessment of Environment-Related Trade Barriers," Working Papers 2001-10, CEPII research center. [Downloadable!]
  20. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sebastien Jean & David Laborde, 2004. "The Impact of Multilateral Liberalisation on European Regions: a CGE Assessment," Working Papers 2004-20, CEPII research center. [Downloadable!]
  2. Hedi Bchir & Lionel Fontagne & Sebastien Jean, 2005. "From Bound Duties to Actual Protection: Industrial Liberalisation in the Doha Round," Working Papers 2005-12, CEPII research center. [Downloadable!]
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  3. Guillaume Gaulier & Sebastien Jean & Deniz Unal-Kesenci, 2004. "Regionalism and the Regionalisation of International Trade," Working Papers 2004-16, CEPII research center. [Downloadable!]
  4. Maria Bas & Ivan Ledezma, 2007. "Market access and the evolution of within plant productivity in Chile," PSE Working Papers 2007-09, PSE (Ecole normale supérieure). [Downloadable!]
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  5. Alessandro Olper & Valentina Raimondi, 2007. "Patterns and Determinants of International Trade Costs in the Food Industry," LICOS Discussion Papers 18807, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  6. Nicolas Péridy, 2007. "Trade Prospects of the New EU Neighborhood Policy: Evidence from Hausman and Taylor's Models," Global Economy Journal, International Trade and Finance Association, vol. 5(1), pages 7. [Downloadable!]
  7. Antoine Bouet & Jean-Christophe Bureau & Yvan Decreux & Sebastien Jean, 2004. "Multilateral Agricultural Trade Liberalization: The Contrasting Fortunes of Developing Countries in the Doha Round," Working Papers 2004-18, CEPII research center. [Downloadable!]
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  8. Disdier, Anne-Célia & Mayer, Thierry, 2005. "Je T'aime, Moi Non Plus: Bilateral Opinions and International Trade," CEPR Discussion Papers 4928, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Guillaume Gaulier & Francoise Lemoine & Deniz Unal-Kesenci, 2005. "China’s Integration in East Asia: Production Sharing, FDI & High-Tech Trade," Working Papers 2005-09, CEPII research center. [Downloadable!]
  10. Alessandro Olper & Valentina Raimondi, 2007. "Market access asymmetry in food trade," LICOS Discussion Papers 18707, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  11. Novy, Dennis, 2008. "Gravity Redux : Measuring International Trade Costs with Panel Data," The Warwick Economics Research Paper Series (TWERPS) 861, University of Warwick, Department of Economics. [Downloadable!]
  12. Balazs Egert & Amina Lahreche-Revil & Kirsten Lommatzsch, 2004. "The Stock-Flow Approach to the Real Exchange Rate of CEE Transition Economies," Working Papers 2004-15, CEPII research center. [Downloadable!]
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  13. Jean-Christophe Bureau & Sébastien Jean & Alan Matthews, 2005. "The Consequences of Agricultural Trade Liberalization for Developing Countries: Distinguishing Between Genuine Benefits and False Hopes," Working Papers 2005-13, CEPII research center. [Downloadable!]
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  14. Maria Bas & Yvan Ledezma, 2007. "Trade integration in manufacturing: the Chilean experience," PSE Working Papers 2007-50, PSE (Ecole normale supérieure). [Downloadable!]
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