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How Much Do Free Trade Agreements Reduce Impediments to Trade?

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  • Kazunobu Hayakawa

    ()

  • Fukunari Kimura

    ()

Abstract

This paper empirically investigates how far free trade agreements (FTAs) successfully lower tariff rates and non-tariff barriers (NTBs) for manufacturing industries by employing the bilateral tariff and NTB data in time series for countries in the world. We find that FTAs under GATT Article XXIV and the Enabling Clause are associated with the 2.0 and 1.5 % lower tariff rates, respectively. In the case of NTBs, on the other hand, their respective effects are 2.1 and 2.4 %. Also, compared with these effects of FTAs, WTO membership does not have large effects on tariff rates but does have them on NTBs. These results provide important implication for the literature on the numerical assessment of FTAs. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, vol. 26(4), pages 711-729, September.
  • Handle: RePEc:kap:openec:v:26:y:2015:i:4:p:711-729 DOI: 10.1007/s11079-014-9332-x
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kazunobu Hayakawa & Tadashi Ito & Fukunari Kimura, 2016. "Trade Creation Effects of Regional Trade Agreements: Tariff Reduction versus Non-tariff Barrier Removal," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 317-326, February.
    2. Fiankor, Dela-Dem Doe & Ehrich, Malte & Brümmer, Bernhard, 2016. "EU-African Regional Trade Agreements as a Development Tool to Reduce EU Border Rejections," Discussion Papers 244352, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    3. Ken Itakura, . "Assessing the Economic Effects of the Regional Comprehensive Economic Partnership on ASEAN Member States," Chapters, Economic Research Institute for ASEAN and East Asia (ERIA).

    More about this item

    Keywords

    Tariff rates; Non-tariff barriers; Free Trade Agreement; World Trade Organization; Simulation; F10; F13; F15;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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