IDEAS home Printed from https://ideas.repec.org/a/udc/esteco/v33y2006i1p45-63.html

Nafta´s trade efects: new evidence with a gravity model

Author

Listed:
  • Claudio E.Montenegro
  • Isidro Soloaga

Abstract

This paper estimates econometrically the impact of NAFTA on US-Mexico and US-third countries (groups of countries) trade flows. Using a traditional gravity-equation framework, we try to see to what extent the bilateral trade flows between the US and different countries differ from a gravity-type specification. By incorporating a series of dummy variables into the specification, we interpret the changes in these dummy variables over time as evidence on whether NAFTA affected the trade patterns. The main conclusion is that NAFTA did not have a significant effect on US trade patterns, neither with Mexico nor with other countries in the world (with exception of CACM).

Suggested Citation

  • Claudio E.Montenegro & Isidro Soloaga, 2006. "Nafta´s trade efects: new evidence with a gravity model," Estudios de Economia, University of Chile, Department of Economics, vol. 33(1 Year 20), pages 45-63, June.
    • Handle: RePEc:udc:esteco:v:33:y:2006:i:1:p:45-63
    as

    Download full text from publisher

    File URL: http://www.econ.uchile.cl/uploads/publicacion/b721c9df-f6a8-4a61-a8f5-79ddb0298325.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arvind Panagariya & Jagdish Bhagwati, 1999. "Preferential Trading Areas and Multilateralism: Strangers, Friends or Foes?," World Scientific Book Chapters, in: Regionalism In Trade Policy Essays on Preferential Trading, chapter 2, pages 47-111, World Scientific Publishing Co. Pte. Ltd..
    2. repec:fth:geneec:93.10 is not listed on IDEAS
    3. Jeffrey J. Schott (ed.), 2004. "Free Trade Agreements: US Strategies and Priorities," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 375, October.
    4. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    5. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    6. Anne O. Krueger, 2000. "NAFTA's Effects: A Preliminary Assessment," The World Economy, Wiley Blackwell, vol. 23(6), pages 761-775, June.
    7. de Melo, Jaime & Montenegro, Claudio & Panagariya, Arvind, 1992. "Regional integration, old and new," Policy Research Working Paper Series 985, The World Bank.
    8. Soloaga, Isidro & Alan Wintersb, L., 2001. "Regionalism in the nineties: what effect on trade?," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 1-29, March.
    9. Foroutan, Faezeh, 1998. "Does membership in a regional preferential trade arrangement make a country more or less protectionist?," Policy Research Working Paper Series 1898, The World Bank.
    10. Antoni Estevadeordal, 1999. "Negotiating Preferential Market Access: The Case of NAFTA," IDB Publications (Working Papers) 9345, Inter-American Development Bank.
    11. Fukao, Kyoji & Okubo, Toshihiro & Stern, Robert M., 2003. "An econometric analysis of trade diversion under NAFTA," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 3-24, March.
    12. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
    13. Faezeh Foroutan, 1998. "Does Membership in a Regional Preferential Trade Arrangement Make a Country More or Less Protectionist?," The World Economy, Wiley Blackwell, vol. 21(3), pages 305-335, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claudio E. Montenegro & Mariana Pereira & Isidro Soloaga, 2011. "El efecto de China en el comercio internacional de América Latina," Estudios de Economia, University of Chile, Department of Economics, vol. 38(2 Year 20), pages 341-368, December.
    2. Muhammad Ullah & Kazuo Inaba, 2012. "Impact of RTA and PTA on Bangladesh’s Export: Application of a Gravity Model," Journal of Industry, Competition and Trade, Springer, vol. 12(4), pages 445-460, December.
    3. Claudio Candia Campano & Medardo Aguirre Gonz�lez & Lilliam Ant�n L�pez & Javier Beltr�n Valdebenito, 2018. "A gravity model of trade for Nicaraguan agricultural exports," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 37(74), pages 391-428.
    4. Duran-Fernandez, Roberto & Santos, Georgina, 2014. "A regional model of road accessibility in Mexico: Accessibility surfaces and robustness analysis," Research in Transportation Economics, Elsevier, vol. 46(C), pages 55-69.
    5. Claudio Candia Campano & Medardo Aguirre Gonz�lez & Lilliam Ant�n L�pez & Javier Beltr�n Valdebenito, 2018. "A gravity model of trade for Nicaraguan agricultural exports," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 37(74), pages 391-428.
    6. Claudio E. Montenegro & Mariana Pereira & Isidro Soloaga, 2010. "China’s effect on Latin America’s international trade," Serie documentos de trabajo del Centro de Estudios Económicos 2010-08, El Colegio de México, Centro de Estudios Económicos.
    7. Duran-Fernandez, Roberto & Santos, Georgina, 2014. "Gravity, distance, and traffic flows in Mexico," Research in Transportation Economics, Elsevier, vol. 46(C), pages 30-35.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:dau:papers:123456789/10626 is not listed on IDEAS
    2. Paola Cardamone, 2007. "A Survey of the Assessments of the Effectiveness of Preferential Trade Agreements using Gravity Models," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 60(4), pages 421-473.
    3. Gauto, Victor F., 2012. "An Econometric Analysis of Trade Creation and Trade Diversion in Mercosur: the Case of Paraguay," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126864, International Association of Agricultural Economists.
    4. Denis Medvedev, 2010. "Preferential trade agreements and their role in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 199-222, June.
    5. Michele FRATIANNI & Chang HOON HO, 2007. "On the Relationship Between RTA Expansion and Openness," Working Papers 288, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Salvador Gil & Rafael Llorca & J. Antonio Martínez‐Serrano, 2008. "Assessing the Enlargement and Deepening of the European Union," The World Economy, Wiley Blackwell, vol. 31(9), pages 1253-1272, September.
    7. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Fitting the Gravity Model when Zero Trade Flows are Frequent: a Comparison of Estimation Techniques using Africa's Trade Data," GlobalFood Discussion Papers 230588, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    8. Scott L. Baier & Jeffrey H. Bergstrand, 2004. "Trade agreements and trade flows: Estimating the effect of free trade agreements on trade flows with an application to the European Union," European Economy - Economic Papers 2008 - 2015 214, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    9. Soloaga, Isidro & Wilson, John S. & Mejia, Alejandro, 2006. "Moving forward faster : trade facilitation reform and Mexican competitiveness," Policy Research Working Paper Series 3953, The World Bank.
    10. Gil-Pareja, Salvador & Llorca-Vivero, Rafael & Martínez-Serrano, José Antonio, 2008. "Trade effects of monetary agreements: Evidence for OECD countries," European Economic Review, Elsevier, vol. 52(4), pages 733-755, May.
    11. Baier, Scott L. & Yotov, Yoto V. & Zylkin, Thomas, 2019. "On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration," Journal of International Economics, Elsevier, vol. 116(C), pages 206-226.
    12. Vaishnavi venkatesh & Ranajoy Bhattacharyya, 2014. "The ASEAN Free Trade Agreement:How Effective?," Working Papers 1425, Indian Institute of Foreign Trade.
    13. Palakiyèm Kpemoua, 2023. "Effects of the dynamic of regional integration on West Africa's trade [Effets de la dynamique de l'intégration régionale sur le commerce bilatéral en Afrique de l'Ouest]," Post-Print hal-04178262, HAL.
    14. Maria Cipollina & Luca Salvatici, 2010. "Reciprocal Trade Agreements in Gravity Models: A Meta‐Analysis," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 63-80, February.
    15. Nevena Stancheva, 2007. "Measurement of the Trade Flows between the EU and Mercosur through Gravitation Analysis," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 66-89.
    16. Mustafizur Rahman & Wasel Bin Shadat & Narayan Chandra Das, 2006. "Trade Potential in SAFTA - An Application of Augmented Gravity Model," Trade Working Papers 22296, East Asian Bureau of Economic Research.
    17. Bayarmaa Ganbaatar & Juan Huang & Chuanmin Shuai & Asad Nawaz & Madad Ali, 2021. "Empirical Analysis of Factors Affecting the Bilateral Trade between Mongolia and China," Sustainability, MDPI, vol. 13(7), pages 1-17, April.
    18. de Sousa, José & Mayer, Thierry & Zignago, Soledad, 2012. "Market access in global and regional trade," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1037-1052.
    19. Theo S. Eicher & Christian Henn, 2011. "One Money, One Market: A Revised Benchmark," Review of International Economics, Wiley Blackwell, vol. 19(3), pages 419-435, August.
    20. Xing Yao & Yongzhong Zhang & Rizwana Yasmeen & Zhen Cai, 2021. "The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-20, March.
    21. Ornelas, Emanuel, 2008. "Feasible multilateralism and the effects of regionalism," Journal of International Economics, Elsevier, vol. 74(1), pages 202-224, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:udc:esteco:v:33:y:2006:i:1:p:45-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Verónica Kunze (email available below). General contact details of provider: https://edirc.repec.org/data/deuclcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.