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RTAs' Proliferation and Trade-diversion Effects: Evidence of the "Spaghetti Bowl" Phenomenon

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  • Zakaria Sorgho

Abstract

This paper investigates the trade-diversion effects of regional trade agreements (RTAs), so-called “Spaghetti bowl” Phenomenon (SBP), in multilateral trade. The SBP is due to the proliferation of RTAs. Thus, I investigate the relationship between the number of RTAs concluded by a country and the additional trade value attributed to an RTA. Using bilateral trade data in a sample of 119 countries, from 1995 to 2012, my main finding reveals a negative trade-effect between them, confirming the existence of SBP multilateral trade. However, results could not conclude evidence of a negative effect of overlapping RTAs, involving the existence of SBP, within North-North, North-South or South-South trade. But, the additional trade value attributed to an RTA concluded with EU countries or US seems to confirm significantly a trade-diversion effect because of the number of RTAs signed by these countries.

Suggested Citation

  • Zakaria Sorgho, 2015. "RTAs' Proliferation and Trade-diversion Effects: Evidence of the "Spaghetti Bowl" Phenomenon," Cahiers de recherche CREATE 2015-2, CREATE.
  • Handle: RePEc:lvl:creacr:2015-2
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    More about this item

    Keywords

    Regional Trade Agreements; Spaghetti Bowl Phenomenon; Gravity equation; Trade diversion;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration

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