Impact Of Trade Agreements Research Articles

Multilevel Modelling in Economics: A Way to Test the Natural-Partner Hypothesis

This study applies multilevel modelling to the analysis of trade flows. This methodology can complement the use of the standard gravity equation in addressing the influence of geographical distance on the impact of trade agreements on bilateral trade (the natural-partner hypothesis). The analysis suggests that the simplest, most obvious, and best way to nest country pairs with international trade data is by distance. To this end, a sample of 69 countries with data on domestic flows over the period 1986–2016 was used. This sample accounts for around 85% of world trade data. The estimations suggest that the pro-trade effects of preferential trade agreements decrease with distance to trade partners, while this does not occur with the multilateral trading system. What is more interesting is that the former result only holds for the preferential trade agreements involving goods, which supports the natural-trading partner hypothesis, but not for those that include services. In the latter case, the impact increases with distance. This suggests that deeper preferential trade agreements reduce the cost of distance as a barrier to trade, which probably reflects cultural (regulation) distance.

The impact of trade agreements. Case of Albania

The impact of trade agreements. Case of Albania

LEVERAGING CPFTA FOR NATIONAL ECONOMIC GROWTH AMIDST GLOBAL CRISES

The global challenges related to pandemics and political disputes are one of the hardest front confronted by international development cooperation and becomes the challenge for regional integration initiatives. During the phase of pandemic it is the matter of great concern for all the governments not only to identify possible outcomes to minimize long term losses to their economies but to facilitate the residents for their recovery to challenge the issues of maintaining their livelihood, poverty, employment and through provision of global public goods.The impact of Trade agreements is long-term on a country's economic outlook. China-Pakistan FTA-I entered into force w.e.f Oct.10th, 2009 and bring zero rates on 35.5% of tariff lines and the CPFTAII entered into force w.e.f. Jan-2020 and in terms of tariff lines, China liberalized 1026 new tariff lines. Under CPFTA, China’s tariff on 313- priority tariff lines were eliminated that which cap over $8.7 billion worth of our International exports and over $64 billion worth of imports from China. As a result, though trade with China has increased manifold, still it could not achieve desired results. Additionally, domestic and global economies are passing through an extraordinary time when the world is confronted by pandemic uncertainties and economic threats convoluted by the Ukraine war crunch, where national preferences shaping against globalization. In this background, we need to fast find solutions to these issues and explore how bilateral agreements can be leveraged for enhancing trade ties for sustainable economic growth. This study examines the trade response using export and import data, which indicates the intensity of trade reciprocity by analyzing pre, and post-CPFTA conditions. This study, therefore, aims to comprehend the role of the China-Pakistan Free Trade Agreement (CPFTA) in Pakistan’s trade regime and its contribution to the economy. The study has compared the imports and Pakistani exports to China during and after the CPFTA-I based on Pakistan’s annual GDP growth rate while for due short period of time from 2019 onwards CPFTA-II data is not utilized for analysis. The resulting analysis will be used to recommend measures to increase trade with China and other regional countries, address non-tariff impediments to maximize utilization of the FTA, and address bottlenecks for the implementation of the Free trade agreement and the results foreshadow forthcoming mutual trade in fields of technology, investment, Agriculture, Blue growth and CPEC between both nations.

Analysing the impact of trade agreements on national food environments: the case of Vanuatu

BackgroundA large body of literature exists on trade liberalisation and the ways in which trade agreements can affect food systems. However, the systematic and objective monitoring of these and their impact on national food environments has been limited. Using a case study, this paper undertakes a systematic analysis of how Vanuatu’s obligations under WTO agreements has impacted its food environment.ResultsData collection was guided by the INFORMAS trade monitoring framework’s minimal approach and seven selected indicators outlined in three domains: trade in goods, trade in services and FDI, and policy space. Strong associations between trade liberalisation and imported foods, especially ultra-processed foods were evident in measured indicators as follows: (i) food trade with 32 WTO countries showing high levels of import volumes; (ii) a marked increase in ‘less healthy’ focus food imports namely fatty and other selected meat products, sugar, savoury snacks, ice-cream and edible ices and energy-dense beverages; (iii) actual and bound tariff rates impacting import trends of ice-cream and edible ices, bakery products and confectionary; and in other instances, a sharp increase in import of crisps, snacks and noodles despite tariff rates remaining unchanged from 2008 to 2019; (iv) policies regulating food marketing, composition, labelling and trade in the domestic space with relatively limited safeguard measures; (v) 49 foreign-owned food-related companies involved in food manufacturing and processing and the production of coffee, bakery products, confectionary, food preservatives, fish, local food products and meat, and the manufacturing, processing and packaging of palm oil, coconut oil, cooking oil, water, cordial juice, flavoured juices, soft drinks and alcoholic beverages. These were largely produced for local consumption; (vi) 32 domestic industries engaged in food and beverage production; and (vii) an assessment of WTO provisions relating to domestic policy space and governance showing that the current legal and regulatory environment for food in Vanuatu remains fragmented.ConclusionsThe analysis presented in this paper suggest that Vanuatu’s commitments to WTO agreements do play an important role in shaping their food environment and the availability, nutritional quality, and accessibility of foods.

Торговая интеграция в АТР: декомпозиция эффектов

The article uses international statistics to make a comparative assessment of the effects of integration within the Asia-Pacific region, the Western and Eastern macro-zones of the Asia-Pacific region, in terms of the contribution of the processes of globalization and regionalization in 1994–2018 due to trade agreements and their expansion. The resulting assessment of the effects of integration indicated a greater contribution of the globalization process to the growth of trade in the Asia-Pacific region (APR), especially for the countries of the Eastern macro-zone. It was found that in the Eastern macro-zone, the impact of trade agreements hindered the positive effects of integration. The author discovers fundamental differences between the effects occurring from expanding trade agreements. The process of globalization prevailed over regionalization only in the exporting countries of the Eastern macro-zone; the effects from regionalization were stronger for the importing countries compared to the exporters, which indicates the manifestation of the effect of trade diversion in the Eastern macro-zone. Obtained estimates indicate that from 1994 to 2018, the globalization process acted as a necessary condition for the expansion of trade in both the APR as a whole and in its Western macro-zone, while the process of regionalization played an important supporting role. In the Eastern macro-zone the positive effects of globalization compensated for the ambiguous effects of the regionalization, which, possibly, was the reason for the unsuccessful attempts to create trade mega-formats within this macro-zone. At the same time, the Eastern macro-zone countries that were expanding trade agreements (based at the economic framework) have achieved noticeable increase in trade interactions, especially exports. This is why it is assumed that the quality of the trade agreements, which affects the impact from their realization, is crucial as the assessment of the effects from proliferation of trade agreements demonstrate implicit discrimination of the countries that implement moderate policy of reducing trade barriers through trade agreements. Given the small size of domestic markets, the APR countries implementing such policy can only rely on the effects from globalization, which tend to diminish over time

The Epoch of Free Trade Agreements in Pakistan and Predominance of China

The study empirically analyses the free trade agreements of Pakistan implicitly and China-Pakistan agreement explicitly by utilizing data of major trade partners of Pakistan from 1996 to 2018. For modeling the impact of trade agreements, gravity equation augmented with different variables, to accommodate zones of trade liberalization of Pakistan. To estimate the equation, feasible generalized least square used in a setting of panel data by controlling for country pair-specific and time-specific effects. Estimates of an extended gravity-based specification reflect that trade liberalization with Malaysia, and Sri Lanka is not as effective as with China and the trade agreement with China is only welfare-led. However, the imports from China are more responsive to free trade agreements as compare to export to China. The findings suggest the next round of negotiations for another phase of the agreement with consideration of the provision of market access to Pakistani exporters.

The impact of trade agreements on world export prices

AbstractThis paper uncovers new stylized facts on the relation between economic integration and world trade prices. Using free on board export price data for the universe of manufacturing products, we show that a country's membership in the WTO (World Trade Organization) or in a PTA (Preferential Trade Agreement) is associated with an increase in export prices of differentiated goods. For the WTO, this effect is captured by the countries that were subject to rigorous WTO accession procedures. We also exploit the importance of the depth of a PTA and of its different provisions. Whereas the effect of the depth per se is not significant, individual provisions evoke distinct effects on prices. In particular, we find that PTAs with provisions on investments are associated with higher export prices. The results are consistent with theoretical models that relate competition to the innovation behavior of firms.

Analysis of the Role of Tariff Concessions in East Asia

While many studies focus on the impact of trade agreements, the literature has not focused on the extent of their implementation, in terms of the aspects agreed upon therein. In this article, we identify the past achievements of economic partnership agreements (EPAs) in the East Asian region in terms of tariff removals and suggest room for further economic benefits from trade liberalisation in the region. Second, we incorporate the HS6-level tariff concession dataset, which distinguishes between tariff removals agreed in these EPAs in East Asia but not yet implemented, from existing overall tariffs in 2011, in the Global Trade Analysis Project (GTAP) Database, which only incorporates enforced tariff reductions through the base-year applied tariffs. To analyse future trade integration, we include commitments that are not yet implemented. This allows us to analyse partial versus full enforcement of tariff concession commitments. Our results suggest that taking those commitments into account matters economically in East Asia. JEL Classification: D58, F13, F14, F15, F17

Impact of trade agreement on rice export: The case of Vietnam

Impact of trade agreement on rice export: The case of Vietnam

The Impact of Trade Agreements on Consumer Welfare—Evidence from the EU Common External Trade Policy

This paper estimates the consumer welfare impact of the new generation of trade agreements implemented by the European Union between 1993 and 2013. We decompose the overall effect into contributions of changes in prices, quality and variety. Estimating trade elasticities for narrow product categories of EU imports, we infer quality from data on imported values and volumes. For the EU as a whole, we find that trade agreements increased quality by 7% on average but did not affect prices or variety. This translates into a cumulative reduction in the consumer price index of 0.24% over our sample period. We also find a high degree of impact heterogeneity across EU countries, trading partners, and the type of trade agreement, with high-income EU countries seeing much stronger quality increases and larger overall consumer benefits.

The Impact of Trade Liberalization in Africa

Africa is one of the most economic-integrated continents by a number of regional trade agreements in the continent. There are about 30 bilateral and multilateral trade agreements within the continents so that each African country is a member of at least one regional trade agreement. Trade between African countries, however, barely exceeds 10% of the total trade of Africa, which is much lower than other continents' intra-regional trade share. This discrepancy between many regional trade agreements and small intra-continent trade share tells that regional economic integrations in Africa are very unsuccessful trade liberalization policies to promote trade. This paper examines a reason why trade liberalization policies in Africa fail. In particular, we investigate the impact of trade agreements in Africa on trade conditional on financial market development and political instability. An empirical study finds that Africa countries' poor financial market accessibility and political instability are key barriers to trade integration in the region. These two factors can explain most disadvantage of African countries in their intra-regional trade. In a dynamic regression, the two factors depress the long-run growth of trade due to trade liberalization in the region significantly, while African continent dummy variable that captures other unobserved trade obstacles in the region has much less effect on trade compared to the literature on African regional economic integration.

The Impact of Trade Agreements on World Export Prices

This paper uncovers new stylized facts on the relation between economic integration and world trade prices. Using export price data combined with data on 32 WTO (World Trade Organization) accessions by developing countries and hundreds of new PTAs (Preferential Trade Agreements), we show that a country’s membership in trade agreements is associated with an increase in export prices of differentiated goods. For WTO, this effect is captured by the developing countries that were subject to rigorous WTO accession procedures. We also exploit the importance of the depth of an PTA and of its different provisions. Whereas the effect of the depth per se is not significant, individual provisions evoke distinct effects on prices. In particular, we find that PTAs with provisions on investments are associated with higher export prices. The results are consistent with recent theoretical models that relate competition to the innovation behavior of firms.

Food supply, nutrition and trade policy: reversal of an import ban on turkey tails

Turkey tails are a cheap, fatty meat, imported into many developing countries. Government of Samoa implemented an import ban on turkey tails in 2007 as part of its efforts to reduce noncommunicable diseases in the country. (1) population of Samoa has some of the highest rates of noncommunicable diseases in the world: in 2013, diabetes prevalence was 20% among adults and prevalence was 53% among men and 77% among women. (2) Dietary change associated with the nutrition transition--characterized by a shift from traditional diets high in cereal and fibre to diets higher in processed foods, sugars, fat and animal-source food--has been a significant contributor to the increase in prevalence of such diseases. In Samoa, as in many other low- and middle-income countries, trade liberalization and policies to promote exports have contributed to reducing the availability of traditional staples and increasing the availability of foods associated with the nutrition transition. (3) ban on turkey tails contributed to shifting consumption away from fatty meats: in a study conducted by the Samoan ministry of health in 2008, just under half of respondents reported that they consumed other cheap meats such as chicken, sausage or mutton instead of turkey tails, while about a quarter said they now ate lower-fat meat or seafood; only a few reported eating less meat overall as the result of the ban. (1) Import data did not suggest a clear substitution of turkey tails with other fatty meats, including chicken, lamb or beef cuts. (1) Government of Samoa removed its ban on turkey tails as part of its accession to the World Trade Organization (WTO) in 2011. removal of the ban illustrated the potential for international trade agreements to stifle innovation in nutrition policy-making through constraining policy space. (4) Concerns have been raised globally regarding the impact of trade agreements on health and nutrition through both the direct impact of trade in unhealthy foods and the constraints on adopting best-practice nutrition policy interventions. (5) In this paper, we examine the rationale for the removal of the turkey tails ban as part of Samoa's accession to the WTO as well as Samoa's response to this removal. We also consider the opportunity for policy learning--regarding the design of food policy for the prevention of noncommunicable diseases--for other low- and middle-income countries facing a rising burden of diet-related such diseases. working party overseeing Samoa's accession to the WTO raised two main concerns about the ban related to issues at the heart of WTO and other trade agreements. (6) Although these concerns reflect key elements of WTO law, the fact that the issues were raised during an accession process rather than a formal dispute means that the removal of the ban does not constitute a formal application of WTO law under any specific agreement(s). Nevertheless, the concerns raised are helpful in understanding important considerations in the design of public health nutrition regulation in relation to trade law, and in particular, to the general agreement on tariffs and trade and the agreement on technical barriers to trade. first concern was the effectiveness of the ban in improving diets and reducing noncommunicable diseases, as other WTO members questioned the prohibition of a single food item in order to address the [...] complex problem of obesity (6). This concern refers to the imperative to use the least traderestrictive measure needed to achieve a policy objective, also called the necessity test. second concern referred to the principle of non-discrimination: The import ban [...] was [...] discriminatory, as there are many high-fat foods, imported and domestic, still available for purchase in Samoa. (6) A key issue here is the availability of like products, a trade term for similar commodities available in the market, which were not subject to the ban. …

Monitoring the impact of trade agreements on national food environments: trade imports and population nutrition risks in Fiji

BackgroundTrade agreements are increasingly recognised as playing an influential role in shaping national food environments and the availability and nutritional quality of the food supply. Global monitoring of food environments and trade policies can strengthen the evidence base for the impact of trade policy on nutrition, and support improved policy coherence. Using the INFORMAS trade monitoring protocol, we reviewed available food supply data to understand associations between Fiji’s commitments under WTO trade agreements and food import volume trends.MethodsFirst, a desk review was conducted to map and record in one place Fiji’s commitments to relevant existing trade agreements that have implications for Fiji’s national food environment under the domains of the INFORMAS trade monitoring protocol. An excel database was developed to document the agreements and their provisions. The second aspect of the research focused on data extraction. We began with identifying food import volumes into Fiji by country of origin, with a particular focus on a select number of ‘healthy and unhealthy’ foods. We also developed a detailed listing of transnational food corporations currently operating in Fiji.ResultsThe study suggests that Fiji’s WTO membership, in conjunction with associated economic and agricultural policy changes have contributed to increased availability of both healthy and less healthy imported foods. In systematically monitoring the import volume trends of these two categories of food, the study highlights an increase in healthy foods such as fresh fruits and vegetables and whole-grain refined cereals. The study also shows that there has been an increase in less healthy foods including fats and oils; meat; processed dairy products; energy-dense beverages; and processed and packaged foods.ConclusionBy monitoring the trends of imported foods at country level from the perspective of trade agreements, we are able to develop appropriate and targeted interventions to improve diets and health. This would enable national health interventions to both identify areas of concern, and to ensure that interventions take into account the trade context.

EVALUATION OF THE TRADE RELATIONSHIP BETWEEN VIETNAM AND CHINA; VIETNAM AND UNITED STATES: A COMPARISON USING GRAVITY MODEL

This study aims to evaluate the determinants of trade relationship between two largest trading partners of Vietnam, United States and China. Using gravity model for time series data from 1986 to 2015, the study found that economic growth rate plays a crucial role in stimulating the trade flow. Both trade relationships fit with the practical approach of Heckscher-Ohlin theory, stating that trade flow increases between countries with different income levels. The most important finding of this study lines on the results regarding the impact of trade agreements. While United States-Vietnam bilateral agreement creates trade, the trade agreement between ASEAN and China produced trade diversion. As China expands its markets among ASEAN countries, Vietnam should diversify its export markets to improve its export flow.

EVALUATION OF THE TRADE RELATIONSHIP BETWEEN VIETNAM AND CHINA; VIETNAM AND UNITED STATES: A COMPARISON USING GRAVITY MODEL

This study aims to evaluate the determinants of trade relationship between two largest trading partners of Vietnam, United States and China. Using gravity model for time series data from 1986 to 2015, the study found that economic growth rate plays a crucial role in stimulating the trade flow. Both trade relationships fit with the practical approach of Heckscher-Ohlin theory, stating that trade flow increases between countries with different income levels. The most important finding of this study lines on the results regarding the impact of trade agreements. While United States-Vietnam bilateral agreement creates trade, the trade agreement between ASEAN and China produced trade diversion. As China expands its markets among ASEAN countries, Vietnam should diversify its export markets to improve its export flow.

The Effect of Binding Commitments on Services Trade

It has long been established in theory that uncertainty impacts on firm behaviour. However, the empirical basis for quantifying the uncertainty-reducing effects of trade agreements has not been firmly established. In this paper, we develop estimates of the effect of reducing uncertainty regarding market access on cross-border services trade by making commitments that are bound under a trade agreement. Specifically, we identify the effect of services trade restrictions on cross-border services trade, as measured by the OECD’s Services Trade Restrictiveness Index (STRI), and the separate effect of “water” in countries’ WTO bindings, as assessed by the difference between their commitments under the General Agreement on Trade in Services and their applied level of market access, as captured by their STRI scores. Using a gravity model, we find that services trade responds positively but inelastically to reductions in services trade barriers, as measured by the STRI, and that the response to actual restrictions is about twice as strong as the response to comparable reductions in uncertainty, as measured by water. Responses are highly heterogeneous across services sectors. We suggest how these results can be used provisionally to quantitatively assess the impact of trade agreements in CGE modelling frameworks, taking into account not only actual liberalization of market access terms and conditions, but also the extent of binding of those commitments.

The Impact of Trade Agreements on Innovation: Implications for Canadian Trade Policy

New trade rules being implemented as part of the on-going wave of major bilateral/regional trade agreements are impacting the complex and evolving innovation ecosystem in non-neutral ways, favouring some innovation modes (such as patent-oriented research and development), but generating stumbling blocks for others (including open-source and co-creation, as well as follow-on innovations). This note considers the implications for Canadian policy in light of the tight nexus that trade theory and empirics draw between trade, innovation and productivity. Canada’s performance on all three fronts – trade, innovation, and productivity – has been decidedly poor for a prolonged period and this is not likely a coincidence. We recommend that implementation of Canada’s recently concluded trade agreements be especially sensitive to impacts on innovation; that Canada seek to preserve space for innovation policy in its future trade agreements; that Canada refrain from using trade agreements to challenge other countries’ measures to promote innovation, since it might eventually wish to imitate them; that Canada promote trade liberalization in services in terms of movement of persons (mode 4) ― including by moving unilaterally to offer Innovation Visas to facilitate the international movement of knowledge workers; and that Canada also take a leading role in developing a new policy synthesis internationally as regards the trade-innovation nexus. We suggest this new policy synthesis explore such issues as (i) the adoption in regional trade agreements of rules of origin (ROOs) that are less restrictive for smaller-valued shipments in order to induce more small and medium-sized enterprises to start exporting their products and importing intermediate inputs to drive innovation; (ii) a plurilateral Digital Economy Trade Agreement to address impediments to digital/electronic international trade; and (iii) supporting the restoration of an Innovation Green Box under the World Trade Organization’s Agreement on Subsidies and Countervailing Measures.

The impact of Trade Agreements on Agriculture Sector, Import and Export: Albanian Case

This study examine the impact of Albanian free trade agreements on the overall economy in general and in agriculture sector, exports and imports in particular, turning out to be increased in significant amounts. These trade agreements have provided the Albanian economy with a competitive advantage and economic space. Among the countries with which Albania has free trade agreements Turkey, Kosovo, Croatia, Macedonia can be mentioned. This means free exchange of goods and services between these countries by exploiting better their competitive advantages. The possibility of the development of agro-industrial industries continues to be high for Albania, because many products can be exported customs duty zero, facilitating the burden of tariffs and taxes. All analyses done about the impact of the FTA on trade facilitation, price reduction and the volume of imports and exports results that generally in 2008 and especially since 2010, there has been seen a positive trend in the increase of the volume of trade, indicating the positive effect of these agreements in the mentioned sectors. Furthermore, there is a need for deep structural changes, including changing the size of the farm, further development of the land market, increased competitiveness, more domestic production, and an increase the level of public and private investments in the future. DOI: 10.5901/jesr.2014.v4n4p421

General Equilibrium Analysis of Albania's Integration with the EU and South Eastern Europe

The aim of this paper is to provide a framework for the analysis of implications of various trade policy options for Albania. We study the impact of implementation of the Stablization and Association Agreement, free trade agreements with South-East European neighbors and reduction of the MFN tariffs. We employ a computable general equilibrium (CGE) model, which allows for evaluation of the likely impact of trade agreements on trade, output, factor rewards, tariff revenue and welfare. Our simulations indicate that Albania has a lot to gain from further integration with its neighbors and the EU. However, the benefits from regional integration can only be realized as long as Albania gains better access for its exports on regional markets. Liberalization of trade with all trading partners allows for a permanent increase of Albanian GDP by 1% on a recurring annual basis and an increase of wages by 3.4% relative to their 2000 level.