Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?

Cheong, Juyoung; Kwak, Do Won; Tang, Kam Ki

doi:10.1111/roie.12162

Cited by 14 publications

(11 citation statements)

References 28 publications

(78 reference statements)

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“…In this appendix, we replicate Tables 2, 3 and 5 but include the variable that captures the trade diversion effect of PTAs, namely OP T A i j t = P k6 = j PT A i kt as an additional regressor, and using biennial CTFEs to circumvent the multicollinearity problem as in Cheong et al (2012). The estimation equation is as follows:…”

Section: Heterogeneity Of Ptas: the Stratification Approachmentioning

confidence: 99%

“…The Pseudo-Poisson-Maximum-Likelihood (PPML) method suggested bySilva and Tenreyro (2006) is also widely used in the studies of the PTA effect, but it is computationally challenging to simultaneously control for CPFEs and CTFEs.12 We have also included the TD term in the estimations using the biennial CTFEs approach as inCheong et al (2012). The results are reported in Appendix C. The findings reported in the main text remain the same qualitatively as well as quantitatively.…”

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confidence: 94%

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Heterogeneous Effects of Preferential Trade Agreements: How does Partner Similarity Matter?

2015

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This paper empirically examines whether and how similarity in country characteristics affects the changes in trade flows amongst member countries under a preferential trade agreement (PTA). It demonstrates that accounting for similarity in size, income and location of member countries is important in obtaining unbiased estimates of the trade creation effect of PTAs. Using both a nonparametric stratification and a parametric interaction term approach, we obtain consistent results that the more similar the member countries are in terms of size, income or location, the larger the level and the proportion increase in intra-bloc trade under a PTA. Extensive sensitivity analyses that account for potential biases due to self-selection of trade, the extensive margin of trade and omission of trade diversion variables confirm the robustness of our results. JEL Code: F15

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Section: Heterogeneity Of Ptas: the Stratification Approachmentioning

confidence: 99%

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confidence: 94%

Heterogeneous Effects of Preferential Trade Agreements: How does Partner Similarity Matter?

2015

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“…In fact, the issue of overlapping CUs and FTAs has been addressed in Mukunoki and Tachi (2006), Melatos and Dunn (2013) and, subsequently, in Lake and Yildiz (2016) and Missios et al (2016). In a related context, Chen and Joshi (2010) note that the decision by a country to enter into an FTA depends on its existing relationships with third countries, while Cheong et al (2015) argue that pre-existing preferential TAs influence the trade creation and diversion properties of new preferential agreements. 11 Note that the phrase 'CUs in disguise' first appears in Appelbaum and Melatos (2012).…”

Section: Introductionmentioning

confidence: 99%

“…In a related context, Chen and Joshi () note that the decision by a country to enter into an FTA depends on its existing relationships with third countries, while Cheong et al . () argue that pre‐existing preferential TAs influence the trade creation and diversion properties of new preferential agreements.…”

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confidence: 99%

Are Customs Unions Really So Scarce?

Appelbaum

Melatos

2018

Economic Record

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We show that generalised customs unions (CUs), in which members choose different external tariff rates while still maximising total member welfare, are always welfare‐superior to both standard CUs with common external tariffs and free trade areas (FTAs). Since generalised CUs are indistinguishable from FTAs in practice, our analysis implies that observed trade agreements (TAs) that have the appearance of FTAs may, in fact, be CUs. This possibility offers one potential explanation for the design of the WTO’s rules on regional TAs, in particular the WTO’s specification of a common external tariff as the defining feature of a CU. Our results also suggest that empirical estimates of the different impacts of FTAs and CUs may be subject to a TAs misclassification bias.

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“…These shares were correspondingly higher compared to 2000 (18.2% for exports and 30.8% for imports). Bergstrand 2007, Cheong et al 2015. It also reflects comparative advantages of Polish agri-food products on the EU market [Szczepaniak 2019].…”

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confidence: 99%

Polish Agri-Food Trade With Non-Eu Countries – A Gravity Model Analysis

Sapa

Droždz

2019

Annals PAAAE

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The main aim of the article was to indicate the influence of selected determinants of Poland’s agri-food export to countries outside the European Union. Although European Union countries have been the Poland’s main trading partners for years, the share of third countries in total Polish trade has gradually been increasing. In the case of Polish agri-food trade, a different tendency is observed, as the importance of non-EU countries is decreasing. In the analysis, covering the years 2000-2016, the gravity model was used. The dependent variable was Poland’s agri-food export to third countries, while independent variables included GDP, the geographical distance between partners, differences of GDP per capita of exporter and importer, agricultural value added, the preferential trade agreement and variable describing whether a given country was a post-socialist country. Research confirmed that the masses of economies expressed in GDP attract trade between countries, while the distance between partners limits it. A positive impact on Polish agri-food exports was observed for agricultural value added and more liberal trade regulations between partners, which were a result of preferential trade agreements between the European Union and selected third countries. On the other hand, historical conditions related to the fact that the country was in the group of socialist countries with economies undergoing a transformation process since the 1990s have limited Polish agri-food exports.

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Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?

Cited by 14 publications

References 28 publications

Heterogeneous Effects of Preferential Trade Agreements: How does Partner Similarity Matter?

Heterogeneous Effects of Preferential Trade Agreements: How does Partner Similarity Matter?

Are Customs Unions Really So Scarce?

Polish Agri-Food Trade With Non-Eu Countries – A Gravity Model Analysis

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