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Evaluating the trade effect of developing regional trade agreements : a semi-parametric approach

Author: Souleymane Coulibaly
Publisher: [Washington, D.C.] : World Bank, Development Research Group, Trade Team, [2007]
Series: Policy research working papers, 4220.
Edition/Format:   Print book : International government publication : EnglishView all editions and formats
Summary:
Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members' trade flows. Instead of the usual dummy  Read more...
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Additional Physical Format: Online version:
Coulibaly, Souleymane.
Evaluating the trade effect of developing regional trade agreements.
[Washington, D.C.] : World Bank, Development Research Group, Trade Team, [2007]
(OCoLC)646997464
Material Type: Government publication, International government publication, Internet resource
Document Type: Book, Internet Resource
All Authors / Contributors: Souleymane Coulibaly
OCLC Number: 143610063
Notes: "May 2007."
Description: 22 pages : illustrations ; 28 cm.
Series Title: Policy research working papers, 4220.
Responsibility: Souleymane Coulibaly.

Abstract:

Many recent papers have pointed to ambiguous trade effects of developing regional trade agreements (RTAs), calling for a reassessment of their economic merits. The author focuses on seven such agreements currently in force in Sub-Saharan Africa (ECOWAS and SADC), Asia (AFTA and SAPTA) and Latin America (CACM, CAN, and MERCOSUR), estimating their impacts on their members' trade flows. Instead of the usual dummy variables for RTAs, he proposes a variable taking into account the number of years of membership. He then combines a gravity model with kernel estimation techniques to capture the non-monotonic trade effects while imposing minimal structure on the model. The results indicate that except for SAPTA, these RTAs have had a positive impact on their members' intra-trade over the estimation period (1960-99). AFTA seems to be the most successful among them, with an estimated positive impact on its members' imports from the rest of the world (hence no trade diversion), but its impact on their exports to the rest of the world is rather limited. During its first 10 years of existence, ECOWAS appears to have had a positive impact on its members' imports from the rest of the world (hence no trade diversion), but this positive impact vanished over time. SAPTA's negative impact on its members' intra-trade is probably an implicit effect of the India-Pakistan tensions over the estimation period.

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