Trade creation and trade diversion in the Canada – United States Free Trade Agreement

Clausing, Kimberly A.

doi:10.1111/0008-4085.00094

Cited by 259 publications

(202 citation statements)

References 22 publications

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“…To show such effects one needs to establish a counterfactual of trade that would have occurred in the absence of the agreement (Clausing, 2001). The gravity model has been used frequently to predict the bilateral trade in the absence of any agreement with the effects of the trade agreements measured by a regional free trade agreement (FTA) dummy (Magee, 2008).…”

Section: Introductionmentioning

confidence: 99%

An Assessment of the Trade Effects of the East African Community Customs Union on Member Countries

Buigut

2012

IJEF

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This study uses a modified gravity model to estimate the trade effects of the recently implemented East African Community (EAC) customs union on individual member countries. The analysis is based on bilateral import data for seventy potential trading partners for the EAC bloc. It covers the period 1996 to 2009. The results suggest the customs union has generated disproportionate impacts on intra bloc exports and imports for individual member countries. Kenya, Uganda and Rwanda have seen a significant increase in their intra EAC exports, while Kenya and Tanzania have seen a significant increase in their intra EAC imports. Significant changes are seen in Kenyan exports and Tanzanian imports up to three years prior to the actual implementation.

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Section: Introductionmentioning

confidence: 99%

An Assessment of the Trade Effects of the East African Community Customs Union on Member Countries

Buigut

2012

IJEF

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“…Clausing (2001) finds little effect of CUSFTA on US-Canada trade using an aggregate gravity approach but finds significant increases in US imports from Canada when using detailed commodity data and tariff changes and using year dummies to control for aggregate effects. There is no evidence of diversion: the US import share from the rest of the world does not fall by more in products with higher preferential reductions.…”

Section:  Trade Creation and Diversionmentioning

confidence: 94%

Preferential Trade Agreements

Limão¹

2016

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A large and growing number of countries participate in multiple preferential trade agreements (PTAs), which increasingly entail broad cooperation over policies extending far beyond trade barriers. I review the traditional and non-traditional motives for PTAs and their empirical determinants as well as their impacts on trade and on multilateral liberalization. I argue that the broad nature of modern PTAs, their substantial creation of bilateral trade and their modest effects on members' tariffs, require us to augment the economic and policy structure of traditional models of PTAs as a static preferential tariff reduction. Throughout I draw lessons from the existing literature and point towards many interesting paths for future research, to advance our understanding of the causes of modern PTAs and their impacts on trade related outcomes and beyond. Nuno Limão Department of Economics University of Maryland 3105 Tydings HallCollege Park, MD 20742 and NBER limao@econ.umd.edu A data appendix is available at http://www.nber.org/data-appendix/w22138 A Online data and programs is available at http://terpconnect.umd.edu/~limao/handbook_pta 1 IntroductionIn 2010 the number of preferential trade agreements (PTAs) in force was four times higher than in 1990. The participation in PTAs is widespread: in 2010 each member of the World Trade Organization also participated in an average of 13 PTAs, up from only 2 in 1990 (WTO, 2011). This trend, the negotiation of mega-agreements by the U.S. and Europe and the evidence discussed below, indicate that PTAs are the most important source of trade policy reform in the last 20 years for most countries.In figure 1 we see that the proliferation of PTAs has continued after the creation of the World Trade Organization (WTO) in a period when non-preferential MFN tariffs were declining. Some of the largest growth has occurred in the last five years even though average MFN tariffs are at their lowest, averaging less than 8% in 2009. The traditional Vinerian view of PTAs, and most of the economic analysis, treats them as a static reduction in tariffs with respect to a preferential partner. But if the initial tariffs are already low then so is the preferential tariff margin, which raises two basic questions. What explains the formation and proliferation of so many PTAs and what are their basic trade and welfare effects on members? Figure 1: Preferential and Multilateral LiberalizationTo answer these two questions I first provide some stylized facts about the importance and evolution of trade between PTA members. Their share of world trade almost tripled between 1965-2010, with "deeper" PTAs becoming increasingly more important. A detailed examination of the provisions of modern PTAs in 2011 reveals policy cooperation far beyond reductions in applied tariffs. I provide a taxonomy of PTAs in terms of policy depth and breadth, where the latter includes economic and noneconomic provisions. Some of these provisions also evolved over time in the context of the GATT/WTO and others go far beyon...

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“…Tariff liberalization under preferential trading arrangements makes it even more difficult o assesses the actual impact of trade integration on growth and trade liberalization. In addition the empirical scientific works also tend to be incapable in describing the dual impact of economic integration on growth and liberalization (Clausing, 2001 andNegasi, 2009). …”

Section: Welfare Effectsmentioning

confidence: 99%

Are Countries Participating into Regional Integration Performing Better in Growth and Liberalization Than Non-Participators? A Study on European Countries

Bose¹,

Bristy²

2017

IJBM

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This study conducted towards identifying practical scenario of effectiveness of regional integration on indicators of trade liberalization and economic growth. Empirical analysis using secondary yet quantitative data using eight ratio and trend analysis on 49 European countries (28 EU and 21 Non-EU) portrays outcome in favor of regional integration. While EU countries seem to be performing consistently in both the categories, Non-EU countries are lagging behind. This outcome comes in the support of the traditional supports of free trade and integration and declares that trade integration creates both dynamic and static effects and trades (open and participatory) actually benefit all.

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Trade creation and trade diversion in the Canada – United States Free Trade Agreement

Cited by 259 publications

References 22 publications

An Assessment of the Trade Effects of the East African Community Customs Union on Member Countries

An Assessment of the Trade Effects of the East African Community Customs Union on Member Countries

Preferential Trade Agreements

Are Countries Participating into Regional Integration Performing Better in Growth and Liberalization Than Non-Participators? A Study on European Countries

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