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The Impact of Regional Trade Agreements on Trade in Agricultural Products

Author

Listed:
  • Jean Christophe Bureau

    (AgroParisTech)

  • Sébastien Jean

    (Institut national de la recherche agronomique)

Abstract

Trade flows are significantly affected by the trade agreements both with respect to impacts on pre-existing trade flows, (intensive margin) and on new, previously non-existent trade flows (extensive margin). The effect of the Regional Trade Agreements on pre-existing trade flows are found to be significant with a mean elasticity of substitution at the product level of about 2 so that a 1% preferential margin increases trade by only 2% on average. Total bilateral exports are found to be increased by 18% on average for products benefiting from a preferential margin between 5 and 10%, and by 48% for products where the margin exceeds 10%. The effect of an RTA agreement on extensive margin is to increase the probability to export a given a product to a partner country by one percentage point on average. Furthermore preferential margins, as measured through their impact on tax-inclusive consumer prices, nearly double within eight years of entry into force rising from 4.7% to 8.9% on average.

Suggested Citation

  • Jean Christophe Bureau & Sébastien Jean, 2013. "The Impact of Regional Trade Agreements on Trade in Agricultural Products," OECD Food, Agriculture and Fisheries Papers 65, OECD Publishing.
    • Handle: RePEc:oec:agraaa:65-en
    DOI: 10.1787/5k3xznkz60vk-en
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    Cited by:

    1. McDougall, Brendan S. & Afesorgbor, Sylvanus Kwaku, 2020. "The Effect of Free Trade Agreements on the Intensive and Extensive Margins of Canadian Agri-Food Trade," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304486, Agricultural and Applied Economics Association.
    2. 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.
    3. Saima Nawaz, 2020. "Institutions, Regional Integration and Bilateral Trade in South Asia: PPML Based Evidence," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(2), pages 221-242.
    4. Marilyne Huchet Bourdon & Chantal Le Mouël & Mindourewa Peketi, 2016. "The impact of regional trade agreements on agrifood trade flows: The role of rules of origin," Working Papers SMART 16-08, INRAE UMR SMART.

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