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Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing

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  • Thomas L. Vollrath
  • Mark J. Gehlhar
  • Charles B. Hallahan

Abstract

Many factors shape the global network of bilateral trade including fundamental forces of supply and demand factors and government policies. This study uses the generalised gravity framework to distinguish among the different drivers that either deter or aid partner trade in land‐intensive agriculture and labour‐intensive clothing. The dataset used in the analysis includes bilateral trade among 70 countries in 1995, 2000 and 2005. Collectively, the 70 countries account for 85% of the world’s trade in agriculture and 96% of its GDP. Empirical results lend support to the Heckscher–Ohlin explanation of trade, namely that relative factor endowments motivate cross‐border trade. Results also show that tariffs are not always binding and bilateral free‐trade agreements more often divert rather than create trade.

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  • Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317, June.
  • Handle: RePEc:bla:jageco:v:60:y:2009:i:2:p:298-317
    DOI: 10.1111/j.1477-9552.2008.00186.x
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    Cited by:

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    2. Grant, Jason H. & Vollrath, Thomas L., 2010. "The New Wave Of Regionalism: Does Outsider/Insider Status Affect The Competitiveness Of U.S. Agricultural Exports?," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61144, Agricultural and Applied Economics Association.
    3. Santeramo, Fabio G., 2017. "On Non-Tariff Measures and Changes in Trade Routes: From North-North to South-South Trade?," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 263493, European Association of Agricultural Economists.
    4. Lota Tamini & Mankan M. Koné & Aristide B. Valéa, 2019. "Impact de la modification de la structure tarifaire américaine sur les exportations bioalimentaires québécoises - Partie 2 : Structure du commerce et des investissements directs étrangers des principa," CIRANO Project Reports 2019rp-03, CIRANO.
    5. Timsina, Krishna P. & Culas, Richard J., 2020. "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    6. Jason H. Grant & Kathryn A. Boys, 2012. "Agricultural Trade and the GATT/WTO: Does Membership Make a Difference?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 1-24.
    7. Sadequl ISLAM, 2011. "The Economic Effects On Nafta Of Trans-Atlantic Free Trade Agreements," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(1).
    8. Grant, Jason H., 2010. "The Latest Wave of Regionalism: Does Outsider Status Affect the Competitiveness of U.S. and Canadian Agricultural Exports?," Working Papers 90888, Canadian Agricultural Trade Policy Research Network.
    9. Ajewole, Kayode & Beckman, Jayson & Gerval, Adam & Johnson, William & Morgan, Stephen & Sabala, Ethan, 2022. "Do Free Trade Agreements Benefit Developing Countries? An Examination of U.S. Agreements," USDA Miscellaneous 329076, United States Department of Agriculture.
    10. Krishna P. Timsina & Richard J. Culas, 2020. "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 889-919, July.
    11. Fabio Gaetano Santeramo & Emilia Lamonaca, 2022. "On the trade effects of bilateral SPS measures in developed and developing countries," The World Economy, Wiley Blackwell, vol. 45(10), pages 3109-3145, October.
    12. Marie M Stack & Rob Ackrill & Martin Bliss, 2019. "Sugar trade and the role of historical colonial linkages," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(1), pages 79-108.
    13. 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.
    14. Philippidis, G. & Resano, H. & Sanjuán, A.I., 2014. "Shifting Armington trade preferences: A re-examination of the Mercosur–EU negotiations," Economic Modelling, Elsevier, vol. 40(C), pages 21-32.
    15. Vollrath, Thomas L. & Hallahan, Charles B., 2009. "Economic costs and payoffs of bilateral/regional trade agreements," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49375, Agricultural and Applied Economics Association.
    16. Vollrath, Thomas L. & Hallahan, Charles B., 2011. "Reciprocal Trade Agreements: Impacts on Bilateral Trade Expansion and Contraction in the World Agricultural Marketplace," Economic Research Report 102755, United States Department of Agriculture, Economic Research Service.
    17. Mirajul Haq & Javeria Saeed & Muhammad Akram, 2021. "Exploring the Advantages and Disadvantages of the China–Pakistan Free Trade Agreement," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(3), pages 83-103, May.
    18. Roux, Nicolas & Kastner, Thomas & Erb, Karl-Heinz & Haberl, Helmut, 2021. "Does agricultural trade reduce pressure on land ecosystems? Decomposing drivers of the embodied human appropriation of net primary production," Ecological Economics, Elsevier, vol. 181(C).

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