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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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    Cited by:

    1. Whalley, John, 2013. "Regional Agreements: A Stocktaking Based on WTO Notifications," Commissioned Papers 156228, Canadian Agricultural Trade Policy Research Network.
    2. Jean-Christophe Bureau & Houssein Guimbard & Sébastien Jean, 2017. "Agricultural Trade Liberalization in the 21st Century: Has it Done the Business?," Working Papers 2017-11, CEPII research center.
    3. 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;Western Agricultural Economics Association.
    4. 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, 2016, Boston, Massachusetts 235847, Agricultural and Applied Economics Association.

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