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Evaluating the trade effect of developing regional trade agreements : a semi-parametric approach

Author

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  • Coulibaly, Souleymane

Abstract

Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members'trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members'intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members'imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members'imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA's negative impact on its members'intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period.

Suggested Citation

  • Coulibaly, Souleymane, 2007. "Evaluating the trade effect of developing regional trade agreements : a semi-parametric approach," Policy Research Working Paper Series 4220, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4220
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Csilla, Lakatos & Lars, Nilsson, 2015. "The EU-Korea free trade agreement: Anticipation, trade policy uncertainty and impact," DG TRADE Chief Economist Notes 2015-2, Directorate General for Trade, European Commission.
    2. Csilla Lakatos & Lars Nilsson, 2017. "The EU-Korea FTA: anticipation, trade policy uncertainty and impact," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 179-198, February.
    3. Festus Ebo Turkson, "undated". "Trade Agreements and Bilateral Trade in Sub-Saharan Africa: Estimating the Trade Effects of the EU-ACP PTA and RTAs," Discussion Papers 12/07, University of Nottingham, CREDIT.
    4. World Bank, 2012. "Reshaping Economic Geography of East Africa : From Regional to Global Integration, Volume 2. Technical Annexes," World Bank Other Operational Studies 11916, The World Bank.
    5. repec:arp:bmerar:2017:p:57-61 is not listed on IDEAS
    6. FE, Doukouré Charles, 2010. "Réduction de Droits de Douane et Convergence Réelle dans l'UEMOA
      [Tariffs Reduction and Real Convergence in WAEMU]
      ," MPRA Paper 26763, University Library of Munich, Germany.
    7. Festus Ebo Turkson, "undated". "Using Observable Trade Data to Measure Bilateral Trade Costs in Sub-Saharan Africa," Discussion Papers 12/06, University of Nottingham, CREDIT.
    8. Jean-Marc Siroën & Aycil Yucer, 2012. "The impact of MERCOSUR on trade of Brazilian states," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 553-582, September.
    9. Felix Barbalet & Jared Greenville & Wayne Crook & Paul Gretton & Robert Breunig, 2015. "Exploring the Links between Bilateral and Regional Trade Agreements and Merchandise Trade," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(3), pages 467-484, September.
    10. repec:eco:journ1:2017-04-82 is not listed on IDEAS
    11. repec:ksa:szemle:1720 is not listed on IDEAS
    12. KURTOVIC, Safet & HALILI, Blerim & MAXHUNI, Nehat & TALOVIC, Sead, 2016. "Liberalization of Trade with the EFTA Countries: Some Evidence from Bosnia and Herzegovina - La liberalizzazione del commercio con i paesi dell’ EFTA: evidenze dalla Bosnia e Herzegovina," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(3), pages 213-232.
    13. Afesorgbor, Sylvanus Kwaku & van Bergeijk, Peter A.G., 2011. "Multi-membership and effectiveness of regional trade agreements in Western and Southern Africa: a comparative study of ECOWAS and SADC," Proceedings of the German Development Economics Conference, Berlin 2011 1, Verein für Socialpolitik, Research Committee Development Economics.

    More about this item

    Keywords

    Free Trade; Trade Law; Trade Policy; Economic Theory&Research; Trade and Regional Integration;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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