Trade creation, trade diversion, and the general equilibrium effects of regional trade agreements: a study of the European Community–Turkey customs union

2015 ◽  
Vol 152 (2) ◽  
pp. 383-399 ◽  
Author(s):  
Christopher S. P. Magee
Keyword(s):  
General Equilibrium ◽  
European Community ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Regional Trade Agreements ◽  
Trade Creation ◽  
Customs Union ◽  
Regional Trade

scholarly journals Trade creation and trade diversion effects from Croatia’s CEFTA and EU membership

2021 ◽  
Vol 72 (4) ◽  
pp. 489-521
Author(s):  
Hrvoje Jošić ◽  
Maja Bašić
Keyword(s):  
Random Effects ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Trade Flows ◽  
Regional Trade Agreements ◽  
Trade Creation ◽  
Total Trade ◽  
Regional Trade ◽  
Eu Membership ◽  
The Eu

This paper provides a detailed empirical study of trade creation and trade diversion effects arising from Croatia's two regional trade agreements, the Central European Free Trade Agreement (CEFTA) and the European Union (the EU). It offers a foundation for discussion about future trade policies in terms of benefits and drawbacks from those regional trade agreements. Croatia’s imports, exports and total trade flows with 180 trading partner countries were examined for the period of 2000 – 2016. Cross-country panel regression using gravity model of international trade assessed pooled OLS, fixed and random effects, as well as more robust Tobit and PPML estimator models. The random effects model found positive effects of Croatia-CEFTA integration evident in trade creation in imports, exports and total trade flows. Croatia-EU integration exhibits no significant effect of trade creation in neither imports, exports nor total trade flows. Nonetheless, there is a trade diversion effect in cases of imports and total trade flows. In the Tobit model CEFTA created trade in imports, exports and total trade flows, while the EU diverted trade in imports and total trade flows. Finally, the robust PPML estimator found that: (1) CEFTA membership created trade in imports, exports and total trade flows, and (2) the EU membership diverted trade in imports and exports, and created trade in total trade flows.

scholarly journals Multilateralism versus Regionalism in Eurasia: Theoretical Reasons of Choosing Sides for Kyrgyzstan

2011 ◽  
Author(s):  
Zamirbek Manasov
Keyword(s):  
World Trade Organization ◽  
World Trade ◽  
Custom Union ◽  
Trade Agreements ◽  
Regional Trade Agreements ◽  
Customs Union ◽  
Regional Trade ◽  
The World ◽  
Short And Long Term

This paper asks whether Kyrgyzstan should take part in the newly established Customs Union among Belarus, Kazakhstan and Russia or in the World Trade Organization (WTO). From the start of the foundation of the new Customs Union there have been deep discussions among the proponents and opponents of organization. This issue attracted extra attention and interest because the new Customs Union includes non-members of the World Trade Organization such as Russia, Belarus, and Kazakhstan. In Addition, the new Customs Union, unlike previous regional trade agreements, has formed a supranational body –the Custom Union Commission - which will decide on Common External Tariffs. Kyrgyzstan is already a member country of WTO and is going to join the new Customs Union. How will this membership work for Kyrgyzstan in short and long-term period? Will the new Customs Union be substitutive or complementary to the WTO in the development of international trade of Kyrgyzstan? Which side would be more beneficial for Kyrgyzstan: membership to a regional Customs Union or to a multilateral WTO? This paper hopes to answer these main questions. This paper will have five sections. Section one will provide a brief introduction. Section two will analyze the development of regionalism and multilateralism in the region. In section three, theoretical compatibility of regionalism and multilateralism will be discussed. Section four will determine what can be proposed for the current situation of Kyrgyzstan according to selected theoretical literature. Concluding remarks will be given in last section.

Evaluation of India's Proposed Regional Trade Agreements With Major Economies Using General Equilibrium Analysis

2021 ◽  
pp. 211-234
Author(s):  
Somesh Mathur ◽  
Naman Agarwal
Keyword(s):  
European Union ◽  
General Equilibrium ◽  
Bay Of Bengal ◽  
Equilibrium Analysis ◽  
Regional Trade Agreements ◽  
Asia Pacific ◽  
Customs Union ◽  
Regional Trade ◽  
General Equilibrium Analysis ◽  
Pull Out

This chapter attempts to analyze trade effects of India's liberalization with the Association of Southeast Asian Nations and five Asia-Pacific countries (ASEAN Plus Five), Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), European Union (EU), India-Japan-Australia trilateral framework, and Southern African Customs Union (SACU). It also tries to look at how they can create new opportunities for trade among the member countries. The authors sort out which of the above-recorded arrangements will be the most welfare upgrading for India. The chapter attempts to comprehend whether India ought to pull out for the occasions to be essential for value-chains in the areas. Maximum gains occur when India liberalizes with all, that is, liberalizes multilaterally followed by ASEAN 10, RCEP, Indo Pacific, CPTPP, MENA, EU 27, 54 nations African FTA, GCC, among others. Services and investment liberalization would bring further dividends to India.

Can trade agreements among small countries create trade?

2020 ◽  
Vol 19 (2) ◽  
pp. 205-216
Author(s):  
Marie Freckleton ◽  
Patrice Whitely
Keyword(s):  
Developing Economies ◽  
Trade Agreement ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Small Island ◽  
Trade Creation ◽  
Small Island Developing States ◽  
Regional Trade ◽  
Regional Trade Agreement ◽  
Content Type

Purpose The purpose of this paper is to examine the effects of a regional trade agreement among a group of small island developing states on trade creation and trade diversion. Design/methodology/approach An augmented gravity model and panel data are used to estimate the trade creation and trade diversion effects. The generalized method of moments technique is used to account for possible endogeneity. Country pair and time fixed effects are also included. Findings The regional trade agreement had a positive effect on intra-regional trade creation, but there was no significant diversion of imports from extra-regional trade partners. Practical implications Small developing economies can benefit from regional trade agreements (RTAs) among themselves. The trade diversion effects of such agreements are likely to be limited. Originality/value To the best of authors’ knowledge, this is the only paper which investigates the impact of RTAs among small island developing states.

The Mystery of Reciprocal Demand for Regional Trade Partnership: Indian Experience in RCEP Regional Value Chains

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Debashis Chakraborty ◽  
Julien Chaisse
Keyword(s):  
Manufacturing Sector ◽  
Mutual Recognition ◽  
Value Added ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Regional Trade Agreements ◽  
Value Chains ◽  
Production Networks ◽  
Regional Trade ◽  
Regional Comprehensive Economic Partnership

AbstractThe decision of a country to join regional trade agreements (RTAs) is guided by its expected welfare gains, though potentials of both trade creation and trade diversion cannot be ruled out through such arrangements. The slow progress of the World Trade Organization negotiations has created a demand for mega-regional trade agreements in the last decade, but the recent US and Indian pullout from Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP), respectively, raised a question on their attraction. One of the major underlying objectives of RTAs is to deepen intra-bloc participation in regional value chains (RVCs) and International Production Networks (IPNs), through adoption of reformed rules of origin (ROO) provisions and mutual recognition agreements (MRA) for standard harmonization. This article, through an analysis of the RVC–IPN participation of the RCEP countries, attempts to understand to what extent the Indian pullout from RCEP can be linked to its unfulfilled expectations. The observations indicate that, relatively modest participation in the RVCs, declining domestic value added content of exports and the associated adverse trade balance scenario have critically shaped the Indian standpoint. The evolving Indian orientation towards trade remedy mechanism can be viewed in this backdrop. The analysis concludes that in the post-coronavirus disease 2019 (COVID-19) period, the Indian decision to consolidate domestic manufacturing sector needs to acknowledge the reality rather than being guided by the rhetoric.

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