Trade Creation and Diversion Effects of Regional Trade Agreements: A Product‐level Analysis

Abstract

1 See WTO webpage, http://www.wto.org/english/tratop_e/region_e/rta_pta_e.htm 2 Baier and Bergstrand (2007) pointed out 'fragility' of estimated treatment effects of RTAs. 3 For example, see Egger (2004) and Carrere (2006) for the application of IV method, Baier and Bergstrand (2007) for fixed effect model, and Egger et al. (2008) for difference-in-difference matching techniques.

The Effects of AfCFTA on Food Security Sustainability: An Analysis of the Cereals Trade in the SADC Region

“…The former refers to a scenario in which trade shifts from inefficient producers to efficient suppliers who are part of the new trade agreement, while the latter refers to a situation in which member countries shift their trade from efficient non-member countries to inefficient member countries, who simply because they are now part of the new agreement, their products would have become cheaper because tariffs are no longer being applied to their products. Thus, trade creation is viewed as welfare enhancing whilst trade diversion is welfare reducing [20][21][22]. According to Viner (1950), the process of trade creation and diversion occurs simultaneously, since several member countries will be trading concurrently with different member and non-member countries [16].…”

Trade Agreement as a Model of Development: The Case of the Japan-Philippine Economic Partnership Agreement (JPEPA)

“…According to Urata, S. and Okabe, M. (2014), using aggregated data in the analysis of a Regional Trade Agreement may not accurately capture its impact to trade since generally the treatment of tariff reduction or elimination differs substantially by product. Hayakawa, K, Ito, T., and Kimura, F. (2016) also used disaggregated tariff line-level trade data in their paper.…”

Trade Creation and Trade Diversion Effects of the ASEAN-China FTA, ASEAN-Korea FTA, and ASEAN-India FTA Implementation on the export of Indonesia's Food and Beverages Industry Products

“…The Distance ( ) is the geographical distance between the capital city (economy center) of Indonesia and the trade partner countries, either the member countries or nonmember countries of ACFTA, AKFTA, and AIFTA. This variable is used as proxy of the transportation costs (Urata & Okabe, 2010).…”

“…Population ( , )is the total population domiciled and settled in a country area. The population is measured with the inhabitant unit, which in this research is the population of the member countries ACFTA, AKFTA, and AIFTA as well as non-member countries (Urata & Okabe, 2010).…”