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Trade, conflicts and political integration: explaining the heterogeneity of regional trade agreements

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  • Vincent Vicard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper investigates the determinants of the shape of regional trade agreements (RTAs). Because the world is constituted by independent political entities, international trade flows take place in a system where property rights are unsecured and RTAs should be understood as regulation mechanisms. In this theoretical framework, trade and security issues interact in the formation of RTAs, so that their determinants differ according to their level of political integration, defined by their ability to promote the negotiated settlement of conflicts. Empirical results confirm that countries more subject to interstate disputes and naturally more opened to trade are more likely to create politically integrated regional agreements, such as common markets or custom unions. On the contrary, international insecurity deters less integrated agreements implying a weak institutional framework, such as preferential or free trade agreements.

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  • Vincent Vicard, 2008. "Trade, conflicts and political integration: explaining the heterogeneity of regional trade agreements," Post-Print halshs-00270618, HAL.
  • Handle: RePEc:hal:journl:halshs-00270618
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00270618
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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," CEPR Discussion Papers 7740, C.E.P.R. Discussion Papers.
    3. Thierry Mayer & Vincent Vicard & Soledad Zignago & Beata Javorcik, 2019. "The cost of non-Europe, revisited," Economic Policy, CEPR;CES;MSH, vol. 34(98), pages 145-199.
    4. Jonas Gamso & Robert Grosse, 2021. "Trade agreement depth, foreign direct investment, and the moderating role of property rights," Journal of International Business Policy, Palgrave Macmillan, vol. 4(2), pages 308-325, June.
    5. 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.
    6. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8m2hh491 is not listed on IDEAS
    7. Vicard, Vincent, 2011. "Determinants of successful regional trade agreements," Economics Letters, Elsevier, vol. 111(3), pages 188-190, June.
    8. Mon, Yi Yi & Kakinaka, Makoto, 2020. "Regional trade agreements and income inequality: Are there any differences between bilateral and plurilateral agreements?," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 136-153.
    9. 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.
    10. Laurent Didier, 2020. "The Impact of Conflict on Trade in Services: A Sector-Level Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(1), pages 34-48, March.
    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. 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.
    13. Ali Dadpay & Saleh S. Tabrizy, 2021. "Political Agreements and Exporting Activities: An Empirical Assessment of the Effects of the JCPOA Agreement on Iran’s Exports," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(1), pages 147-180, March.
    14. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.
    15. 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.
    16. 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.
    17. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2021. "Foreign Influence and Domestic Policy," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 426-487, June.
    18. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    19. 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.
    20. Victoria Pistikou, 2020. "The Impact of CEFTA on Exports, Economic Growth and Development," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 13(3), pages 15-31, December.
    21. Deka, Devajyoti, 2013. "An explanation of the relationship between adults’ work trip mode and children’s school trip mode through the Heckman approach," Journal of Transport Geography, Elsevier, vol. 31(C), pages 54-63.

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    More about this item

    Keywords

    International conflicts; political integration; regionalism; trade; war; guerre; régionalisation; commerce international; Conflits internationaux; intégration politique;
    All these keywords.

    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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