On the Trade-diversion Eﬀects of Free Trade Agreements
Standard trade theory suggests that Free Trade Agreements (FTAs) could disrupt trade between members and non-members. However, the trade diversion eﬀects of FTAs have not been thoroughly examined empirically. Using a novel empirical approach, we conﬁrm that FTAs that entered into force during the 1990s diverted trade away from non-member countries. Interestingly, we ﬁnd that diversion from internal trade due to FTAs was signiﬁcantly stronger than diversion from external trade.
|Date of creation:||16 Aug 2013|
|Date of revision:||08 Oct 2013|
|Contact details of provider:|| Web page: http://www.lebow.drexel.edu/|
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FRB Atlanta Working Paper
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