Using the structural gravity framework, this paper estimates the effect of three important concepts in the international trade flows between One Belt One Road (OBOR) countries. These facets have been previously discussed separately in the literature: the partial equilibrium effects on international trade flows of regional trade agreements, intranational trade, and international borders. The methodology used in this paper yields econometrically plausible and robust estimates of the impact of regional trade agreements (RTAs) on bilateral trade among the member countries by accounting for distance puzzle and several sensitivity analyses, such as endogeneity, phasing-ins of the RTAs, reverse causality, multilateral influences, and various estimation techniques. This study confirms that by taking globalization effects into account, the impact of RTAs on trade among OBOR countries becomes negligible. Also the declining effect of international borders on trade flow among OBOR countries suggests that the trade is facilitated more between the open economies.

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Currently, the world is witnessing one of China’s most significant economic integration initiatives–One Belt One Road (OBOR). This article aims to evaluate the general equilibrium (GE) effects of this initiative on member nations. The structural gravity model is used in this study to perform the counterfactual analysis while analysing the conditional and general equilibrium effects of the trade policy of border removal on international trade flow among the member countries. The estimates suggest varied strade gains for the member countries in response to the trade policy changes. Most Asian countries are witnessing an increase in producers’ prices and therefore gaining more from globalisation. We also deduced that the member countries had reached half of their potential to trade gains, with most developing countries witnessing a decrease in multilateral trade resistance (MTR). The findings of this study implicate a debate for the policymakers over continuing support for further trade integration. JEL Codes: C21, F15, F17