The Evolution and Reshaping of Globalization: A Perspective Based on the Development of Regional Trade Agreements

Abstract

With the weakening role of the World Trade Organization multilateral trading system, the globalization pattern is moving toward regional economic integration. As a result, the number of regional trade agreements (RTAs) has rapidly increased. New trends in international economics and trade, such as the withdrawal of the US from the Trans‐Pacific Partnership and the trade disputes between the US and China, have revealed the intention of the developed countries represented by the US to reshape the direction of globalization. This paper combines the relevant research conclusions and current stylized facts to examine the evolution and reshaping of globalization. We find that: (i) countries have different attitudes toward the recent round of globalization, which are related to changes in the patterns of income distribution within countries caused by the last round of globalization; and (ii) regional economic development is an effective way to reshape globalization. The self‐strengthening effect of the hub country in the trade network has promoted global RTA expansion.

The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis

“…The results of the panel structural gravity model are presented in Table 2. We first used the dummy variable (PTAs) to measure whether a trade agreement exists the two-countries, and the results are shown in column ( 1)- (3). The results in column (1) of Table 2 shows that the impact of PTAs on bilateral trade is positive and significant.…”

“…The results are presented in column (2)-(4) of Table 4. Column (2) and (3) show that the coverage index of PTAs is insignificant if the country is from a high-income group. However, the depth of the PTAs is still significant at the 1% level.…”

“…PTAs are an exception to WTO's non-discrimination principle, because only their signatories enjoy more favorable market access conditions. Thus, different PTAs are heterogeneous in terms of the market access level and the cooperation beyond tariff reductions, in services trade, investments, standards, public procurement, competition and intellectual property rights [2][3][4]. Previous studies have constructed variables to measure the heterogeneity of PTAs according to the content of PTA documents [5][6][7].…”

Effects of Regional Trade Agreement to Local and Global Trade Purity Relationships

“…Here, r i,j is a representative of trade resistance, which we use as a composite of all the other factors that affect trade volumes other than countries' GDP. Equation (1) indicates that the trade amount F i,j is proportional to m i and m j but inversely proportional to the integrated effective distance between them, denoted as r i,j . In contrast to the traditional gravity model, here, a country's geographical distance d i,j is replaced with trade resistance r i,j .…”

“…With the rapid development of international trade, as of 2020, the World Trade Organization (WTO) has 164 members representing 98 percent of world trade. However, in addition to this extensive multilateral trading system, the world has also witnessed unprecedented proliferation of regional trade agreements (RTAs) since the 1990s [1]. In 2013, 546 notifications of RTAs were received by the General Agreement on Tariffs and Trade (GATT)/WTO [2].…”