Effects Of Free Trade Agreements Research Articles

An Empirical Study on the Effects of Non-Tariff Barriers on FTAs: Regarding Import Control Measures of the Target Country on Korea's FTA

Purpose - The purpose of this study is to analyze the effects of non-tariff barriers on the Free Trade Agreement. Currently, it has achieved significant export effects by signing free trade agreements with many countries in Korea. However, most countries have implemented non-tariff barriers to protect their industries. This study analyzes the effects of non-tariff barriers in counterpart countries that have signed a free trade agreement. Design/methodology/approach - For analysis, first, prior studies were summarized, and second, the current status of free trade agreements and non-tariff barriers were identified. And, based on the current situation, the relationship between non-tariff barriers and export volume was analyzed. The targets of analysis are the United States, China, and Vietnam, which are Korea s three largest exporters. As for non-tariff barriers, anti-dumping tariffs, countervailing tariffs, and emergency import restrictions were analyzed as import regulatory measures. Findings - In the case of the United States, it can be seen that the decline in textiles, steel and electronics sectors is even greater. In the case of China, it can be seen that exports declined after imposing non-tariff barriers in the steel sector. Finally, it can be seen that exports declined after Vietnam implemented a non-tariff barrier on the steel sector. It was found that non-tariff barriers offset the effects of the Free Trade Agreement. Research implications or Originality - Currently, Korea has free trade agreements with numerous countries. However, after the free trade agreement entered into force, the number of annual average import regulation investigations for Korean products is on the rise. In the end, the implementation of non-tariff barriers is offsetting the effects of free trade agreements. Therefore, when signing a free trade agreement, it is necessary to thoroughly prepare for import regulatory measures such as the insertion of provisions of non-tariff barriers.

Measuring trade creation effects of free trade agreements: Evidence from wine trade in East Asia

East Asia has experienced an unprecedented expansion in its wine market over the past two decades. This paper examines the extent to which import tariff reductions through bilateral free trade agreements (FTAs) have contributed to an increase in wine imports to Japan, China, and South Korea. Our empirical method involves estimating an augmented version of the gravity equation by the Poisson pseudo-maximum likelihood (PPML) technique. Analyzing a panel dataset for 1990–2016 covering 27 exporters, we find that overall a 1 percentage point reduction in tariff among FTA member countries is associated with an increase in the wine import volumes by 0.042%, which is seven times higher than a similar reduction in tariff on an MFN basis. The strongest trade creation effects are founded for bottle wine. The results are robust to various specifications.

Effect of free trade agreements on pharmaceutical market competition: The case of the 2009 US-Peru free trade agreement and its implementation as national drug policy

Free Trade Agreements (FTA) are controversial for threatening essential aspects of health, especially access to affordable medicines. The US-Peru FTA required changes in the Peruvian pharmaceutical legislation that resulted in the implementation of the National Drug Policy (NDP) of 2009. The NDP included more robust technical requirements for registration, a Peruvian Good Manufacturing Practices certificate, a longer timeline for drug registration, and an increase in registration fees. This study evaluated the impact of the FTA on the number of registrations and competition in the Peruvian pharmaceutical market.Data for the period January 2005 to April 2014 were provided by the Peruvian drug regulatory authority (Dirección General de Medicamentos, Insumos y Drogas, DIGEMID). A total of 31,114 pharmaceutical products with unique registration numbers were evaluated. Brand drug new registrations decreased from 1789 in 2005 to 455 in 2013, and the number of generic registrations decreased from 621 in 2005 to 114 in 2013. Brand re-registrations also decreased from 714 in 2005 to 58 in 2013. There were 228 brand products awaiting registration in 2009 and 1,908 in 2013. The proportion of products awaiting registration was three times greater for brand than for generic products in 2009–2013.Registration of brand and generic medicines significantly declined after the implementation of the US-Peru FTA in 2009. The decline in the number of registrations was associated with more robust technical requirements, a longer DIGEMID registration timeline, and an increase in registration fees. The stronger registration requirements are expected to increase the quality of the drugs marketed in the country, but also less competition and a reduction in domestic registrations.

Effect of Trade Liberalization on Asymmetric Countries for Homogenous and Differentiate Product: Case of Pakistan-China Free Trade Agreement

The study performs an empirical test to assess the impact of the Pakistan-China Free trade agreement (FTA) on Pakistan, China, and the World's exports under homogenous and differentiated products. This study employs the modeling with Poisson specification with Poisson Pseudo-Maximum Likelihood method for the estimations. The results of empirical test show that the effect of FTA on the FTA and Non-FTA countries is greater in the differentiated product as compared to the homogenous product. Therefore, one of the most important policy implications provided by this study is that export enterprises need to concentrate on differentiated products as compare to the homogenous products after the implementation of the Pakistan-China FTA. Moreover, the previous literature concluded that Pakistan-China FTA was more beneficial for China as compared to Pakistan. However, according to this study, if Pakistani enterprises focus more on differentiated products as compared to homogenous products, then it will be equally beneficial for both Chinese and Pakistani enterprises. This study will contribute to the literature by considering the Bertrand competition between asymmetric countries and find out the effect of the FTA on these three countries. It considers China, Pakistan, and the Rest of the World as first, second, and third countries.

Ex-post assessment of heterogenous effects of trade agreements: the case of Turkey

Purpose -Free trade agreements (FTA) are prominent features of international trade. The proliferation of FTAs over the past 20 years is one of the most prominent aspects of the global economy. Turkey has also signed many FTAs in this period on the basis of obligations stemming from customs union with European Union. FTAs aim to increase trade flows and welfare through liberalizing trade and achieving a deeper integration between partners. In this respect, FTAs are getting more and more important as international trade is a crucial tool to boost the economic development. Indeed, getting the utmost benefit from FTAs is very important for Turkey and other developing countries. Regarding the increasing importance of FTAs, the ex-post effects of FTAs on Turkey’s trade are examined in this paper. Methodology -In the light of recent techniques, structural gravity model is used in this study. Trade data used consists of aggregate trade flows among pairs of 90 countries from 1988-2016, 29 years in total. As the estimation technique, Ppml_panel_sg command is used. This is an estimation command for Poisson pseudo-maximum-likelihood (PPML) regression for panel gravity models with time varying importer and exporter fixed effects and time invariant pair fixed effects. Findings-The results indicate the econometric evidence of the impact of FTAs on Turkey’s trade. When all FTAs are considered at macro level, the results suggest that, FTAs had a statistically significant positive effect on exports and imports of Turkey. However, at micro level, there is substantial variation and heterogeneity in the agreement specific effects and trade direction specific effects within the agreement. Conclusion-This paper provides the first evidence that the impact of FTAs are heterogenous and not all the FTAs affected the trade of Turkey in the same positive way. Even within the same agreement, the effects vary considerably depending on the direction of trade.

The Effects of Free Trade Agreements on Smes’ Direct and Indirect Exports

FTAs have been known to have large positive effects on trade creation between member countries. However, it is relatively unexplored how much small/medium-sized enterprises (SMEs) accounted for in the trade creation due to FTAs compared to large-sized enterprises (LEs). We find that Korean FTA policies have significantly increased SMEs’ direct exports to FTA partner countries between 2005 and 2017, although the effects were as much as a half of those for LEs, which indicates a considerable LEs’ premium in the direct export effects of FTAs. We further find that the FTAs also significantly increased the indirect exports of Korean firms, i.e., the domestic input supplies through in-dustrial input-output linkage, and that SMEs have benefited more from the indirect export effects of FTAs than LEs. Considering the direct and indirect export effects together, the LEs’ premium in the total export effects of FTA is found to become smaller.

Literature Review on Trade Effect of Free Trade Agreement

Literature Review on Trade Effect of Free Trade Agreement

Effect of the Belt and Road Initiative on Agricultural Value Chain Linkages: Evidence from Eora 26 Input-Output Data

The Belt and Road Initiative（BRI）aims to create a new paradigm of China’s opening-up. Using the input-output data from Eora 26 database from 1995 to 2015, this paper measures the agricultural value chain linkages（AVCL）by fun-tuning the cross-border times indicator, examines the policy effect of the BRI on AVCL, and analyzes the potential mechanism and heterogeneity of the policy effect. We find that the implementation of the BRI has significantly promoted the AVCL between China and economies along the Belt and Road from the perspectives of both value-added outflow and inflow, which is confirmed by a series of effectiveness checks. The heterogeneous effect analysis suggests that economies along the overland Silk Road and in areas adjacent to China get stronger AVCL promotion, and the policy effect is significant for economies with low political and investment risks, but not in those with high political and investment risks. We also explore the potential interference effect of free trade agreements（FTA）using triple difference models, which indicates that the AVCL promotion effect of the BRI is robustly significant, but FTA partner countries get stronger AVCL promotion. Also, we find that the policy effect of the BRI on AVCL is mainly achieved by reducing agricultural trade costs and extending agricultural production lengths. The above results have important policy implications: First, under the existing cooperation mechanism, it is necessary to formulate advanced agricultural cooperation agreements, and the quasi-public goods role of BRI should be fully utilized in the field of international food security and high-quality agricultural development. Second, China can take advantage of its own agricultural production capacity, identify the heterogeneity of the target market, distinguish the comparative advantages of different markets in the cooperation of primary agricultural products, agricultural semi-finished products, and agricultural capital products, take into account the political environment and business operations of different markets, and formulate differentiated agricultural cooperation policies. Third, countries along the Belt and Road should promote cooperation in the fields of cross-border e-commerce, agricultural product inspection, and construction of agricultural industrial parks, so as to reduce the cost of cross-border agricultural trade and extend the cross-border agricultural value chains.

English

English

The Effect of IJ-EPA to Indonesia Export: Interupted Time Series (ITS) Approach

Indonesia Japan Economic Partnership Agreement (IJ-EPA) is a bilateral free-trade agreement between Indonesia and Japan that has been started from July 1st, 2008. After more than a decade of its implementation, there is a question that we need to be addressed: Does liberalization of IJ-EPA make Indonesia’s export to Japan increase? This question is important since the government gives a trade-off by giving lower tariff for certain commodities agreed in agreement to increase export. Using Interrupted time series (ITS) analysis based on time-series data from Statistics Indonesia (BPS), this article found that the impact of IJ-EPA decreased for Indonesia export to Japan. Furthermore, this paper proposed some potential commodities that can increase the effectiveness of this FTA. The importance of this topic is that Indonesia will maximize the benefit in implementing of agreement that they made from the third biggest destination export of their total export value, so it will be in line with the government's goal to expand export market to solve current account deficit. In addition, the method that used in this paper can be implemented to other countries so that they can maximize the effect of Free Trade Agreement, especially for their export.

The effects of free trade agreements on regional wages in China

We empirically study the effects of free trade agreements on regional wages in China using Redding and Venables’ (2004) extended model and manufacturing firm-level data in China from 2000 to 2007. We show that although free trade agreements can, in general, increase firms’ average wage level, they also contribute to increasing the wage gap in China. We also find that free trade agreements can have different effects on firms’ wages across China. In particular, they have stronger effects on average wage levels in land border regions than in coastal regions. Moreover, although firms in land border regions may be located closer to the partner countries of free trade agreements, they may still prefer to use shipping to transport goods. Our findings have important policy implications. In particular, we suggest that free trade agreements with China’s western neighbors should be accompanied by the development of appropriate land transportation networks. Moreover, income tax policy regimes should be differentiated across regions in China.

Effects of Free Trade Agreements on Chinese Forestry Industry: A Context Analysis with the 21st-Century Maritime Silk Road Countries

Tang, L.; Jin, C.; Tian, Y., and Li, L., 2020. Effects of free trade agreements on Chinese forestry industry: A context analysis with the 21st-Century Maritime Silk Road countries. In: Gong, D.; Zhang, M., and Liu, R. (eds.), Advances in Coastal Research: Engineering, Industry, Economy, and Sustainable Development. Journal of Coastal Research, Special Issue No. 106, pp. 290–294. Coconut Creek (Florida), ISSN 0749-0208.With the deepening of economic globalization, signing trade agreements has become the most important way to promote trade cooperation among countries. With the implementation of the 21st-Century Maritime Silk Road initiative, China is committed to continue expanding the opening and deepening of regional economic and trade cooperation in this region. Using the data of 58 countries along the 21st-Century Maritime Silk Road from 2003 to 2017, this study uses the propensity score matching and difference-in-differences method to explore the free trade agreement (FTAs) impact on Chinese forestry industry. The results show that FTAs have a significantly positive impact on exports of Chinese forestry industry. After controlling for the impact of the global financial crisis in 2008 and removing the extreme values in the sample, FTAs still have a significantly positive impact on exports of Chinese forestry industry.

Have the free trade agreements reduced inflation rates?

Most previous studies have examined extensively the economic effects of free trade agreements (FTAs) such as their effects on economic growth, income distribution across industries, price competitiveness for international trade, trade volume, and the price of a commodity, but not very much on inflation rates. This study empirically estimates how much FTAs affect domestic inflation rates. From the cross-country panel data analysis of 34 OECD countries over the period 1980−2014, the expansion of FTAs shows a significant negative effect on the Consumer Price Index inflation, which is more apparent than the traditionally used openness measure. The inflation reduction effect is more significant in countries with a low level of openness than those with a high level of openness.

BÖLGESEL TİCARET ANLAŞMALARI(BTA)’NIN GELİŞİMİ VE DERİN TİCARET ANLAŞMALARI: TÜRKİYE’NİN SERBEST TİCARET ANLAŞMALARI (STA) AÇISINDAN BİR ANALİZ

Tüm Dünya’da Bölgesel Ticaret Anlaşmaları(BTA)’nın sayısı özellikle 1980’lerden sonra artış göstermiştir. Ancak son yıllarda bu artış ivmelenmiştir. Küresel ticaretin yapısının değişmesi, küresel ticaretteki aktörlerin farklılaşması, yeni sorunların ortaya çıkması ve de en önemlisi Dünya Ticaret Örgütü(DTÖ)’nün bu sorunların çözümünde yetersiz kalması ülkeleri ticaret anlaşmaları yapmaya sevk etmiştir. Son dönemde yapılan anlaşmaların içeriği de yeni konuların gündeme gelmesiyle değişmiştir. Daha fazla düzenlemenin hükme bağlandığı daha fazla alanı kapsayan bu anlaşmalar Derin Ticaret Anlaşmaları olarak anılmaktadır. Türkiye’de son dönemde daha fazla BTA yapmaktadır. Türkiye’nin yürürlükte olan bir Gümrük Birliği Anlaşması ve 21 tane Serbest Ticaret Anlaşması (STA) bulunmaktadır. Bu çalışmanın amacı da Türkiye’nin STA’larını analiz etmektir. Çalışmada ulaşılan bulgulara göre Türkiye’nin STA kapsamındaki ticareti yeterli düzeyde değildir. Ayrıca Türkiye’nin imzaladığı STA’ların derinliği de oldukça düşüktür. Türkiye’nin ticaretini arttırmak ve daha fazla yatırım çekmek için derin ticaret anlaşmaları imzalaması gerekmektedir.

Perspectives of the Transatlantic Free Trade Agreement between the EU and the US after BREXIT

In this article, the author presents the legal nature and economic effects of Free Trade Agreements (FTA or RTS according to WTO terminology) on economies of members and third countries. The second aim was an evaluation of the economic effect of TAFTA (TTIP) on the United States and the European Union in the case of Brexit as well as some potential impact on third countries and alternative FTAs as counterweights to TTIP. To identify the mathematical and statistical relationships, I constructed correlation and regression models between dependent and independent variables. The dependent variables are GDP, independent variables of GDP per capita, unemployment, exports and imports, price index and investment, as well as the country’s participation in the free trade zone. To evaluate the independent variable (specifically the participation in the free trade zone), a “dummy variable” I used with values “0” during ten years prior the entrance intro free trade zone and “1” during ten years after the entrance of a particular country into the free trade zone. The general conclusions following from my study is that RTS allows many countries to negotiate and achieve much more preferential trade conditions than is possible at the multilateral level.

Does Trade Liberalization Improve Public Health? The Effect of Free Trade Agreements and Multilateralism in Pharmaceutical Sector in India.

Despite several economic reforms in India post-1991, millions of Indian households do not have access to drugs because they lack purchasing power or public health facilities. The present article critically examines the potential public health implication of trade liberalization to facilitate access to a variety of good quality drugs at affordable costs. Using the partial equilibrium model, the article suggests that multilateralism and free trade agreements (FTAs) both have a positive impact on welfare gains, consumer surplus, and trade volume in pharmaceutical industries in India. However, the study found that multilateralism is clearly associated with improved human welfare, particularly health. Multilateral trade liberalization should, therefore, be viewed in terms of its wider socioeconomic impact, rather than through the narrow lens of country-specific FTAs.

Effect of Free Trade Agreements on the Structure of Korean Livestock Farming

Effect of Free Trade Agreements on the Structure of Korean Livestock Farming

Türkiye’nin İmzaladığı Serbest Ticaret Anlaşmaları: İki YanlıSektörel Bir Analiz ve Dış Ticaret Politikası Açısından Bir Değerlendirme

Özellikle İkinci Dünya Savaşından sonra dış ticaretin serbestleşmesi çabaları artmıştır. Bu çabalar küresel ve bölgesel çabalar olarak ikiye ayrılabilir. Küresel çabalar, Gümrük Tarifeleri ve Ticaret Genel Antlaşması (GATT) ve ardından kurulan Dünya Ticaret Örgütü (WTO) ile verilmektedir. Bölgesel çabaları ise, Tercihli Ticaret Anlaşmaları (TTA), Gümrük Birlikleri (GB) ve özellikle son dönemde yaygın olan Serbest Ticaret Anlaşmaları (STA) temsil etmektedir. Türkiye 1980’li yıllardan itibaren benimsediği “ihracata dayalı büyüme modeli” kapsamında hem küresel hem de bölgesel çabaların içinde yer almıştır. Bölgesel çabalar özelinde bakıldığında Türkiye’nin temelde iki amaçla STA imzaladığı görülmektedir. Birincisi; ürünlerini satacak yeni pazarlar bulmak ve dış ticarette ülke çeşitlendirmesine gitmek; ikincisi ve asıl neden ise, Türkiye’nin Avrupa Birliği (AB)’nin GB’ne dâhil olması nedeniyle, AB’nin dış ticaret politikasını uygulama yükümlülüğüdür. Türkiye 2018 yılına kadar otuz yedi adet STA imzalamıştır. Bu anlaşmalardan yirmi adedi yürürlükte bulunmaktadır. İmzalanan STA’ların on bir tanesi, imzacı ülkelerin AB üyesi olmaları nedeniyle feshedilmiştir. Müzakereleri tamamlanmış ancak ülkelerin iç onay süreçlerinde bulunan beş adet STA bulunmaktadır. Bu çalışmada; Türkiye’nin imzaladığı STA’ların taraf ülkelerle olan ticareti üzerine etkileri, 1980-2017 dönemi için iki yanlı dış ticaret verileri, ihracat ve ithalat büyüme hızları, bilateral yoğunlaşma endeksi, sektörel-bilatarel ticaret yoğunlaşma endeksi (SBT) ve açıklanmış karşılaştırmalı üstünlük endeksi (RCA) kullanılarak analiz edilmiş ve bulgular dış ticaret politikası açısından değerlendirilmiştir.

Are Labour Provisions in Free Trade Agreements Improving Labour Conditions?

This paper investigates the impact of labour provisions in Free Trade Agreements (FTAs) on labour market conditions in the ratifying countries. Using panel data for up to 96 countries and a time-span from 1995 to 2008, matching techniques and a difference-in-differences approach are applied to identify the effect of FTAs on labour conditions, distinguishing between those with and without labour provisions. The results show that FTAs partially improve labour conditions in the participating countries, and that there are differences in these outcomes between agreements with specific labour provisions and those without. Empirical analysis reveals that labour provisions might be a suitable instrument to ensure labour standards, but also that a ‘global race to the bottom’ may not be prevented through these provisions per-se. The correct targeting of labour provisions is highly likely to play a crucial role in the context of avoiding a race to the bottom.

Heterogeneous Impacts of Free Trade Agreements: The Case of Japan

This paper investigates the trade creation effects of Japan's free trade agreements (FTAs) using aggregate trade data for the years 1996–2015. We estimate various specifications of a gravity model. Our main finding is that the effects of Japan's FTAs are not clearly observed when the gravity model is specified with three types of fixed effects (i.e., exporter-year fixed effects, importer-year fixed effects, and country-pair fixed effects). In fact, the effects of FTAs vary substantially among trade partners and around half of the FTAs increase Japan's trade values. Our results also suggest that FTAs with small trade partners tend to have large effects on Japan as well as other countries. Recently enforced FTAs, however, increase Japan's import values more rapidly.