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Terms-of-Trade Impacts of Trade Agreements and the Choice of Trade Policy

Listed author(s):
  • Joachim Jarreau

    ()

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

This paper studies the impacts and determinants of trade policy. I use data on applied tariff protection of world countries over 2001-2007 to estimate sector-level trade elasticities. I then calibrate a structural gravity model of world trade. I compute the impacts of trade agreements which were implemented and of those which were not. I find that expected real income gains predict the signing of PTAs. Decomposing these gains shows that domestic mill price increases, reflecting market access gains, have a larger impact than the impact on the consumer price index. I also find that larger expected gains from multilateral liberalization reduce the probability to engage in preferential agreements.

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File URL: https://halshs.archives-ouvertes.fr/halshs-01023214/document
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Paper provided by HAL in its series Working Papers with number halshs-01023214.

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Date of creation: Jul 2014
Handle: RePEc:hal:wpaper:halshs-01023214
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01023214
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