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Have Asian trade agreements reduced trade costs?

  • Pomfret, Richard
  • Sourdin, Patricia

Regionalization of trade in East Asia increased in the 1990s, and has been accompanied by a growing number of trade agreements. The wave of trade agreements is in part a response to the need to facilitate trade in order to make regional value chains more profitable. This paper draws on a rich Australian database for the period 1990-2007, which allows us to control for distance and commodity characteristics and to identify cross-country variation in trade costs. The results, indicating the extent to which East Asian countries' trade costs have fallen over the regionalization period relative to changes in other regions' trade costs, provide evidence of the existence of effective policy steps to facilitate trade and also that these steps have multilateral as well as bilateral or regional benefits.

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Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 20 (2009)
Issue (Month): 3 (May)
Pages: 255-268

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Handle: RePEc:eee:asieco:v:20:y:2009:i:3:p:255-268
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  1. Jeffrey A. Frankel & Miles Kahler, 1993. "Introduction to "Regionalism and Rivalry: Japan and the United States in Pacific Asia"," NBER Chapters, in: Regionalism and Rivalry: Japan and the United States in Pacific Asia, pages 1-18 National Bureau of Economic Research, Inc.
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  14. Richard Pomfret & Patricia Sourdin, 2008. "Why Do Trade Costs Vary?," School of Economics Working Papers 2008-08, University of Adelaide, School of Economics.
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