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

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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.

Suggested Citation

  • Vincent Vicard, 2008. "Trade, conflicts and political integration: explaining the heterogeneity of regional trade agreements," Documents de travail du Centre d'Economie de la Sorbonne bla08022, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:bla08022
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    References listed on IDEAS

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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," CEPREMAP Working Papers (Docweb) 1019, CEPREMAP.
    3. Vicard, Vincent, 2011. "Determinants of successful regional trade agreements," Economics Letters, Elsevier, vol. 111(3), pages 188-190, June.
    4. 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.
    5. 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.
    6. Seitz, Michael & Tarasov, Alexander & Zakharenko, Roman, 2015. "Trade costs, conflicts, and defense spending," Journal of International Economics, Elsevier, vol. 95(2), pages 305-318.
    7. Laura Márquez-Ramos & Inmaculada Martínez-Zarzoso & Celestino Suárez-Burguet, 2011. "Determinants of Deep Integration: Examining Socio-political Factors," Open Economies Review, Springer, vol. 22(3), pages 479-500, July.
    8. 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.
    9. 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.
    10. Mayer, Thierry & Vicard, Vincent & Zignago, Soledad, 2018. "The Cost of Non-Europe, Revisited," CEPR Discussion Papers 12844, C.E.P.R. Discussion Papers.
    11. Toke S. Aidt & Facundo Albornoz & Esther Hauk, 2019. "Foreign influence and domestic policy," Discussion Papers 2019-03, University of Nottingham, GEP.
    12. repec:eee:jotrge:v:31:y:2013:i:c:p:54-63 is not listed on IDEAS
    13. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8m2hh491 is not listed on IDEAS
    14. 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.
    15. Fenske, James & Kala, Namrata, 2017. "1807: Economic shocks, conflict and the slave trade," Journal of Development Economics, Elsevier, vol. 126(C), pages 66-76.
    16. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    17. 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.

    More about this item

    Keywords

    International conflicts; political integration; regionalism; trade; war;

    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
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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