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ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?

Author

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  • Lucian Cernat

    (United Nations Conference on Trade and Development)

Abstract

It has generally been argued that regional trade agreements (RTAs) among developing countries may induce potential adverse effects on trade patterns among RTA members and between them and third countries. Using an expanded gravity model this paper estimates for a number of regional trade arrangements among developing countries the gross trade creation and diversion effects resulting from RTA formation. This paper brings evidence in favor of the idea that South-South RTAs, and African RTAs in particular, are not more trade diverting than other RTAs. This evidence suggests that increased trade with both regional partners and third countries in the case of South-South RTAs might be explained by the removal of “invisible” trade barriers as a result of trade facilitation measures favored by RTA formation.

Suggested Citation

  • Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0109001
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    Keywords

    South-South RTAs;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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