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Do Regional Trade Agreements Really Boost Trade? Estimates for Agricultural Products

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  • Sébastien Jean
  • Jean-Christophe Bureau

Abstract

The trade effects of tariff preferences are assessed using difference-in-differences panel estimations, whereby exports to third destinations and imports from third origins are used as benchmarks. The method is applied at a detailed product level for 74 agreements, over the period 1998-2009, for the agricultural and food sector. We estimate the mean elasticity of substitution across imports at the product level to be slightly below 4, with significant but limited differences across types of agreements and level of preferential margin. Counterfactual simulations suggest that RTAs have increased bilateral agricultural and food exports between partners by 30% to 40% on average, with a marked heterogeneity across agreements. RTAs are also found to increase the probability to export a given a product to a partner country, but this impact is estimated to be lesser than one percentage point on average.

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  • Sébastien Jean & Jean-Christophe Bureau, 2015. "Do Regional Trade Agreements Really Boost Trade? Estimates for Agricultural Products," Working Papers 2015-09, CEPII research center.
    • Handle: RePEc:cii:cepidt:2015-09
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    More about this item

    Keywords

    regional trade agreement; international trade; agricultural products; tariff protection;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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