Impact Of Regional Trade Agreements Research Articles

Impact of Globalisation on India’s exports with special reference to Regional Trade Agreements

Coinciding with the era of globalisation, there has been a rise in the number and depth of Regional Trade Agreements (RTAs) in the Asian region. As India has also been a part of this growing trend, this paper attempt to identify the determinants of India’s exports with special focus on the role of globalisation and RTAs of India. We employ panel data regression on an augmented gravity model to examine the effects of these variables. To capture the globalisation effect, we have included trade openness of the host country. For RTAs, we have taken two variables; one which indicates the presence or absence of an RTA in a given year; and second is the number of RTAs between India and its partner country. Using data for nine countries which are India’s trading partners over the period 1991-2012, we find that GDP and GDP per capita of the host country are significant determinants of India’s exports. Trade openness which is an indicator of globalisation is positive and highly significant indicating that trade openness of the partner country has resulted in increased Indian exports to that country. Of the two variables capturing the impact of RTAs, the variable defining the number of RTAs negotiated with trading partners is positive and significant. The results show that while presence of an RTA may have a positive impact on Indian exports, they are still not a prime consideration. At the same time, the width of integration is having a significant positive impact on India’s export.

Impact of Regional Trade Agreements in East Asia on Members’ Trade Flows

Using an unbalanced panel dataset of bilateral trade flows, we study the determinants of two-way trade for Australia, China, India, Japan, New Zealand, Korea and the ten ASEAN countries from 1990 to 2009. We find that bilateral trade flow is positively related to the sum of the GDP of trading countries, and similarity in GDP size, but inversely related to relative factor endowment differences, transportation costs and import tariffs. Our empirical results suggest that formulating an East Asian Free Trade Area is important for promoting intraregional trade. Furthermore, there is a need to provide a range of instruments to assist least-developed ASEAN countries in designing and implementing appropriate trade integration policies through the provision of technical and financial assistance as well as analytical support.

Impact of RTA and PTA on Bangladesh’s Export: Application of a Gravity Model

As part of its growth strategy, Bangladesh instituted a trade liberalization process in the early 1990s which gained momentum in later years. Trade grew from 24.4 to 45% of GDP between 1980–81 and 2007–08, an indicator of increased liberalization as well as the growing importance of the external sector in Bangladesh. Apart from its unilateral liberalization, Bangladesh participates in three different regional trade agreements (RTAs): the South Asian Free Trade Agreement (SAFTA), the Asia Pacific Trade Agreement (APTA) and the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation Free Trade Area (BIMSTEC FTA). In addition, Bangladesh signed preferential trade agreements (PTAs) with the member countries of the Developing 8 (D8). Because of the growing importance of RTAs, this study investigates their contribution to the export flows from Bangladesh using the gravity model that has become the primary tool for estimating the trade effects of regional integration. Regression results of bilateral exports for 40 countries from 1992–2009 indicate two crucial aspects. Firstly, all the RTAs consistently maintained statistically significant negative signs, except the BIMSTEC FTA and SAFTA, which showed insignificantly positive and insignificantly negative effects respectively. Secondly, the intensity of negative effects and the level of significance have shown a declining trend as the status of those blocs has changed from political or economic cooperation agreements to preferential agreements and from preferential agreements to free trade agreements. Thus, the intensity of tariff liberalization and the degree of sectoral coverage seem to be the important determinants of the RTAs’ performance. Therefore, experts expect that full-fledged implementation of FTA provisions and the elimination of all tariff and non-tariff barriers might result in a higher degree of integration.

Evaluating the Contributions of Regional Trade Agreements to Governance of Services Trade

Since the early 1990s, regional trade agreements (RTAs) covering trade in services have proliferated, with 95 RTAs on services notified to the World Trade Organization (WTO) under Article V of the General Agreement on Trade in Services (GATS), as of June 2011. This paper discusses how RTAs support or debilitate the GATS in its governance function as the keeper of rules and liberalization commitments on services trade for WTO members. It addresses this question and its implications for governance by focusing on four different issues: architecture; compliance; ability to promote reforms; and actual impact of RTAs in fostering services trade.

Multi-Membership and the Effectiveness of Regional Trade Agreements in Western and Southern Africa: A Comparative Study of ECOWAS and SADC

textabstractUsing a gravity model for 35 countries and the years 1995-2006 we estimate the impact of regional trade agreements in Africa (in particular ECOWAS and SADC) and compare this to the a benchmark of North South trade integration (Europe’s preferential trade agreement). We find that • ECOWAS and SADC membership significantly increases bilateral trade flows (and by more than for example preferential trade agreements with the EU do), • SADC membership has a stronger impact compared to ECOWAS and • that the impact of multi-membership critically depends on the characteristics of the overlapping RTA. We find a positive impact if an additional membership complements the integration process of the original RTA: overlapping memberships had a significant positive effect on bilateral trade within the ECOWAS bloc but it is insignificant for SADC.

The Impact of Regional Trade Agreements on International Trade

The gravity model of international trade states that bilateral trade flows based on the economic sizes and distances between two units can be used to examine reasons for international trade. Regional Trade Agreements (RTAs) have appeared recently and have increased markedly in number; however, despite their importance, little study has been performed to analyze the effects of RTAs on international trade. The difference between RTAs and world trade organizations (WTO) is important. Studies of currency integration have appeared recently; however, most assume that currency integration varies the level of international trade between countries by making the proportion constant. This paper eliminates this socalled constant hypothesis and indicates that RTAs alters the slope of the relationship between countries and promote international trade. Empirical analysis indicates that the proportion is not constant. Also, this study shows that RTAs promote international trade more in OECD countries than in non-OECD countries.

The Impact of Regional Trade Agreements on the Global Orientation of Emerging Market Multinationals

We analyze how an aspect of institutional change—regional integration in the form of regional trade agreements (RTAs)—affects the degree of global orientation (DGO) of emerging market (EM) multinational enterprises (MNEs). We decompose regional integration into three key dimensions reflecting variations among RTA member countries—RTA Diversity, RTA Potential Market Size, and RTA Experience. We conceptualize and test how these three RTA characteristics determine firms’ DGO on a sample of 421 MNEs from 27 EMs worldwide during 2000–2006. We find that greater RTA Diversity and RTA Experience increase EM MNEs’ global orientation, while greater RTA Potential Market Size influences the EM MNEs to be more regionally oriented. Conversely, our post-hoc analyses revealed that the results do not hold for MNEs based in the three most developed nations in the European Union—Germany, France, and the UK—emphasizing important differences of the effects of RTA characteristics on EM vs. Triad MNEs’ DGO.

Estimating regional trade agreement effects on FDI in an interdependent world

Abstract Recent research on trade and multinationals highlights that multinational firms’ integration strategies are complex and the degree of vertical integration varies in a multilateral world with many possible locations of activity. In particular, multinationals control a large fraction of trade within the block of developed countries. The most important regional trade agreements (RTAs) are signed between members of the very same block of economies. This gives rise to the question asked in the present paper: what is the impact of RTAs on FDI in an interdependent world? Recent spatial HAC estimation techniques are applied to both estimation and testing.

Estimating Regional Trade Agreement Effects on FDI in an Interdependent World

Recent research on trade and multinationals highlights a novel issue with multinational firms. In particular, their integration strategies are complex and the degree of vertical integration varies in a multilateral world with many possible locations of activity. Multinationals may choose some plants to serve consumers locally only, whereas others engage in trade. Overall, this may explain the fact that a high percentage of world trade is actually controlled by multinational firms, although most of the foreign direct investment (FDI) occurs within the block of developed countries. The most important regional trade agreements (RTAs) are signed between members of the very same block of economies. This gives rise to the question asked in the present paper: what is the impact of RTAs on FDI in an interdependent world? The paper focuses on the role of the Europe Agreements between the member countries of the European Union and ten Central and Eastern European countries. In doing so, recent spatial HAC estimation techniques are applied to both estimation and testing.

Is Regionalism an Increasing Feature of the World Economy?

Measuring the importance of regionalism in international trade is desirable but difficult. The number of regional trade agreements (RTAs) reported to the WTO or the proportion of world trade which is between countries in a RTA are frequently cited as evidence that regionalism is growing at an accelerating rate. This paper questions whether RTAs really are as important as the headline numbers suggest, or whether they just occupy an excessively large part of policymakers' and economic journalists' time. The main contributions are to analyse the number of RTAs and the share of world trade criteria in order to show why both are meaningless measures of the extent of regionalism in the current world economy. The impact of RTAs on world trade is difficult to assess because some of the most important RTAs go beyond trade to deep integration measures, while a large number of RTAs are either not implemented or have very limited coverage. The tendency towards extreme outcomes (ie. economic union or negligible economic effects) explains why, despite the apparent proliferation of RTAs, regionalism has not posed a serious challenge to the world economy as the multilateral trading system has over the last sixty years gone from strength to strength.

The Impact of Regional Trade Agreements on Canadian Agriculture

The Impact of Regional Trade Agreements on Canadian Agriculture