On the Trade-diversion Eﬀects of Free Trade Agreements
AbstractStandard trade theory suggests that Free Trade Agreements (FTAs) could disrupt trade between members and non-members. However, the trade diversion eﬀects of FTAs have not been thoroughly examined empirically. Using a novel empirical approach, we conﬁrm that FTAs that entered into force during the 1990s diverted trade away from non-member countries. Interestingly, we ﬁnd that diversion from internal trade due to FTAs was signiﬁcantly stronger than diversion from external trade.
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Bibliographic InfoPaper provided by LeBow College of Business, Drexel University in its series School of Economics Working Paper Series with number 2013-3.
Length: 11 pages
Date of creation: 16 Aug 2013
Date of revision: 08 Oct 2013
International Trade; Gravity; Free Trade Agreements; Trade Diversion;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
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