Preferential Trade Agreements under Declining American Hegemony

Abstract

We examine the international determinants of the formation of preferential trade agreements (PTAs) according to the theory of hegemonic stability. The main conclusions are as follows. First, as the theory of hegemonic stability argues, the lack of a stable hegemon fosters the formation of PTAs. When hegemony is measured by trade share and investment share in the global economy, the erosion of hegemony fosters PTAs. Second, hegemony measured by GDP share has a positive effect on PTA formation; however, this measure is not consistent with the theory's prediction. Third, improvement in the level of democracy worldwide is unrelated to the formation of PTAs.

Did Inter-Regional Trade Agreements Bring Mutual Benefits? An Empirical Scheme of Indonesian Commodity Exports in Asean-China Free Trade Area

“…The invasion of Chinese products has increasingly put pressure on the Indonesian market and Indonesia's exports to China for these commodities have fallen sharply. The volume of fruit imports from China increased almost tenfold from 1999 to 2004 (Tambunan & Suparyati, 2009; see also, Park et al, 2009;Ishiguro, 2018;Wijaya, 2017). Likewise for vegetable imports which increased 235 times from 1998 to 2004.…”