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Is the growth of regionalism as significant as the headlines suggest? Lessons from agricultural trade

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  • Jason H. Grant

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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  • Jason H. Grant, 2013. "Is the growth of regionalism as significant as the headlines suggest? Lessons from agricultural trade," Agricultural Economics, International Association of Agricultural Economists, vol. 44(1), pages 93-109, January.
    • Handle: RePEc:bla:agecon:v:44:y:2013:i:1:p:93-109
    DOI: j.1574-0862.2012.00635.x
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    2. Jean‐Christophe Bureau & Houssein Guimbard & Sébastien Jean, 2019. "Agricultural Trade Liberalisation in the 21st Century: Has It Done the Business?," Journal of Agricultural Economics, Wiley Blackwell, vol. 70(1), pages 3-25, February.
    3. Whalley, John, 2013. "Regional Agreements: A Stocktaking Based on WTO Notifications," Commissioned Papers 156228, Canadian Agricultural Trade Policy Research Network.
    4. Santeramo, Fabio, 2019. "Trade Effects of SPS Measures in Regional Trade Agreements," 2019: Recent Advances in Applied General Equilibrium Modeling: Relevance and Application to Agricultural Trade Analysis, December 8-10, 2019, Washington, DC 339342, International Agricultural Trade Research Consortium.
    5. Fabio Gaetano Santeramo & Valentina Guerrieri & Emilia Lamonaca, 2018. "On the Evolution of Trade and Sanitary and Phytosanitary Standards: The Role of Trade Agreements," Agriculture, MDPI, vol. 9(1), pages 1-15, December.
    6. Kim, Dongin & Steinbach, Sandro, 2022. "Preferential Trading in Agricultural and Food Products: New Insights from a Structural Gravity Analysis and Machine Learning," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322200, Agricultural and Applied Economics Association.
    7. Jin, Y. & Jin, S., 2018. "The Heterogeneous Impact of Exchange Rate Volatility on Agricultural Export: Evidence from Chinese Food Firm-level Data," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277197, International Association of Agricultural Economists.
    8. Grant, Jason H. & Boys, Kathryn A., 2015. "The GATT/WTO Trade Effect 20 Years Later: A Critical Review and New Insights," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205896, Agricultural and Applied Economics Association.
    9. Harada, Kimie & Nishitateno, Shuhei, 2021. "Measuring trade creation effects of free trade agreements: Evidence from wine trade in East Asia," Journal of Asian Economics, Elsevier, vol. 74(C).
    10. Hejazi, Mina & Grant, Jason H. & Peterson, Everett, 2016. "Hidden Trade Costs? Maximum Residue Limits and US Exports to Trans-Atlantic and Trans-Pacific Trading Partners," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235847, Agricultural and Applied Economics Association.

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