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Trade, conflict, and political integration: Explaining the heterogeneity of regional trade agreements

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  • Vicard, Vincent

Abstract

Many historians argue that the main goal of European trade integration was the preservation of peace. This paper investigates whether this reasoning is relevant for the EU and other regional trade agreements (RTAs). I provide empirical evidence that customs unions and common markets (deep RTAs) do reduce the probability of war between members. Partial scope and free trade agreements (shallow RTAs) however have no effect on war probabilities. Accordingly, international insecurity has a differential impact on incentives to create RTAs. Deep RTAs are signed between countries that are involved in many interstate disputes and that have low trade costs with the rest of the world, whereas the opposite is true for shallow RTAs.

Suggested Citation

  • Vicard, Vincent, 2012. "Trade, conflict, and political integration: Explaining the heterogeneity of regional trade agreements," European Economic Review, Elsevier, vol. 56(1), pages 54-71.
  • Handle: RePEc:eee:eecrev:v:56:y:2012:i:1:p:54-71
    DOI: 10.1016/j.euroecorev.2011.06.003
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    Cited by:

    1. Baldwin, Richard & Jaimovich, Dany, 2012. "Are Free Trade Agreements contagious?," Journal of International Economics, Elsevier, vol. 88(1), pages 1-16.
    2. Martin, Philippe & Mayer, Thierry & Thoenig, Mathias, 2010. "The geography of conflicts and free trade agreements," CEPREMAP Working Papers (Docweb) 1019, CEPREMAP.
    3. Vicard, Vincent, 2011. "Determinants of successful regional trade agreements," Economics Letters, Elsevier, vol. 111(3), pages 188-190, June.
    4. Vincent Vicard, 2009. "On trade creation and regional trade agreements: does depth matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(2), pages 167-187, July.
    5. Andrei SCRINIC, 2014. "The Eastern Partnership As Part Of The Eu Foreign Policy: A Review Of Theoretical Approaches," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 1, pages 219-230.
    6. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.
    7. Hadjiyiannis, Costas & Heracleous, Maria S. & Tabakis, Chrysostomos, 2016. "Regionalism and conflict: Peace creation and peace diversion," Journal of International Economics, Elsevier, vol. 102(C), pages 141-159.
    8. Libman, Alexander & Vinokurov, Evgeny, 2016. "Региональные Организации: Типы И Логика Развития
      [Regional Organizations: Typology and Development Paths]
      ," MPRA Paper 79383, University Library of Munich, Germany.
    9. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8m2hh491 is not listed on IDEAS
    10. Philippe Martin & Thierry Mayer & Mathias Thoenig, 2012. "The Geography of Conflicts and Regional Trade Agreements," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(4), pages 1-35, October.
    11. Fenske, James & Kala, Namrata, 2017. "1807: Economic shocks, conflict and the slave trade," Journal of Development Economics, Elsevier, vol. 126(C), pages 66-76.
    12. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    13. Egger, Peter & Larch, Mario & Staub, Kevin E, 2012. "Trade Preferences and Bilateral Trade in Goods and Services: A Structural Approach," CEPR Discussion Papers 9051, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    International relations; Regionalism; Trade; War;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F15 - International Economics - - Trade - - - Economic Integration
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism

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