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The Impact of Free Trade Agreements on International Agricultural Trade: A Gravity Application on the Dairy Product Trade and the ASEAN-China-FTA

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  • Schaak, Henning

Abstract

This paper uses a gravity model to analyse the impact of the ASEAN-China-FTA on the international trade of dairy products. It uses a multinomial PML estimator with country fixed effects and a suitable framework to differentiate between trade creation and trade diversion effects in terms of imports and exports. The used dataset contains disaggregated data for 36 countries, including the ASEAN member countries, China and the 25 largest dairy exporting countries from 1995 until 2013. The dataset contains data on the three SITC dairy product groups as well as their aggregate. The estimates of the model include significant values for all framework effects. They indicate that there are trade creation, import diversion and export diversion effects for all four commodity groups. The estimated overall net trade effect is negative. Hence the current implementation of the FTA should be critically evaluated with respect to dairy products.

Suggested Citation

  • Schaak, Henning, 2015. "The Impact of Free Trade Agreements on International Agricultural Trade: A Gravity Application on the Dairy Product Trade and the ASEAN-China-FTA," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 211619, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi15:211619
    DOI: 10.22004/ag.econ.211619
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    3. Wong, Colin Koh-King & Liew, Venus Khim-Sen & Arip, Mohammad Affendy, 2021. "The Effects Of Asean-China Free Trade Agreement On Bilateral Trades," MPRA Paper 107943, University Library of Munich, Germany.
    4. Rudi Purwono & Lilik Sugiharti & Rossanto Dwi Handoyo & Miguel Angel Esquivias, 2022. "Trade Liberalization and Comparative Advantage: Evidence from Indonesia and Asian Trade Partners," Economies, MDPI, vol. 10(4), pages 1-21, March.

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