The Trade and Welfare Effects of Greek Membership in the EU

2002 ◽  
Vol 52 (4) ◽  
pp. 473-496
Author(s):  
Nicholas Tsounis
Keyword(s):  
Trade Diversion ◽  
Welfare Effects ◽  
Trade Creation ◽  
Customs Union ◽  
External Trade ◽  
Dynamic Effects ◽  
Total Trade ◽  
The Impact ◽  
Of Greece ◽  
The Eu

This paper presents quantitative estimates of the trade and welfare effects of the entry of Greece into the EU and presents a tool for assessing the impact of the Central and Eastern European Countries' accession to the EU. Both the static and the dynamic effects of the entry of Greece into the EU are examined. When looking at the static effects, it is shown that there was a “net”trade creation of about USD 1.6 billion, which accounted for approximately 4.4% of the GDP of the year before accession. It has also been found that 86% of the total trade creation was internal trade, while 84% of the entire trade diversion was external trade diversion, these being results that accord with the theory of the customs union. When we make an assessment of the dynamic effects, we can see that Greece's EU entry had mixed reactions in different sectors: for about two-thirds of the examined sectors we find that Greece's integration into the EU was desirable - in general, however, the integration indices found are close to being the same, thereby showing that the dynamic effects of the country's EU entry have been minimal.

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.

Was India Right in Not Joining RCEP? A Cost–Benefit Analysis

2021 ◽  
pp. 097492842110477
Author(s):  
Monika Jain
Keyword(s):  
New Zealand ◽  
South Korea ◽  
Free Trade ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Asia Pacific ◽  
Trade Creation ◽  
Asean Countries ◽  
The Cost ◽  
The Impact

India dropped out of the Regional Comprehensive Economic Partnership (RCEP), which included the Association of Southeast Asian Nations (ASEAN) countries, China, South Korea, New Zealand, Japan and Australia, after negotiating for almost seven years in November 2018 on the grounds of national interest and also that free trade agreements (FTAs) did not amount to free trade and led to more trade diversion than trade creation. The cost and benefit of a regional agreement depend on the amount of trade creation with respect to trade diversion (Panagriya, 2000). This study tries to examine India’s concerns and at the same time, highlights the cost of not joining RCEP. India’s trade deficit with 11 out of the 15 RCEP nations has been a major cause of concern. Unfavourable trade balance, concerns about the impact on dairy sector, economic slowdown, past experience with FTA’s, China factor, data localisation, rules of origin, the experience of ASEAN countries with Sino-FTA have been some of the reasons behind India’s decision to opt-out of this mega multilateral agreement. Also, bilateral trade agreements with some RCEP countries such as Japan, Malaysia, Singapore, Thailand and South Korea were operational. A multilateral trade agreement with ASEAN countries was very much in place. So, trade between India and 12 of the RCEP member countries would not have changed much after India’s inclusion in RCEP. The impact of lower tariffs would have been evident for the remaining three countries: China, Australia and New Zealand. Furthermore, there was fear of a massive surge in imports of manufactures from China, dairy imports from Australia and New Zealand. This study also examines the long term impact of this decision and if India has missed out on becoming a part of the global value chain and gaining greater market access in the Asia Pacific region. India’s policy of import substitution and protectionism did not capitulate desired results in the past. Hence, a critical evaluation of India’s decision and some validation on her concerns and fears have been done.

Comparative Advantage In The Southern Africa Customs Union (Sacu)

2013 ◽  
Vol 8 (2) ◽  
Author(s):  
Macleans Mzumara ◽  
Betty Mkwinda Nyasulu ◽  
Margaret Mzumara ◽  
Elias Kaunda
Keyword(s):  
South Africa ◽  
Comparative Advantage ◽  
Low Cost ◽  
Trade Diversion ◽  
Trade Creation ◽  
Customs Union ◽  
Product Lines ◽  
Common External Tariff ◽  
The Common ◽  
Narrow Base

The authors sought to find out whether the Southern African Customs Union (SACU) possesses comparative advantage. They found that South Africa has comparative advantage in the production of 727 product lines, Botswana in 268 product lines, Swaziland 243 product lines, Namibia 213 product lines and Lesotho 85 product lines. They also found that the highest degree of specialization in a particular product was observed in Lesotho in the production of cartridges for rivet with an average RCA index of 19215. The authors concluded that SACU has comparative advantage although such comparative advantage has a narrow base for a customs union (CU). Further it was concluded that due to imposition of the common external tariff (CET) in SACU and a narrow base of the products in which it has comparative advantage, it may be experiencing trade diversion rather than trade creation by replacing low cost producers outside SACU in favour of intra-SACU high cost producers. That South Africa, although not the least producer, is unfairly benefiting due to the imposition of CET which prevents other countries from exporting their products to Botswana, Swaziland, Namibia and Lesotho under the same conditions.  These countries are, therefore, disadvantaged. For this reason, the authors advocate communication at policy level, to facilitate expansion of SACU as means of narrowing trade diversion.

scholarly journals Economic Unions and the Gravity Model: Evidence from Eurasian Economic Union

2018 ◽  
Vol 8 (3) ◽  
pp. 90-98
Author(s):  
Robert Tumanyan
Keyword(s):  
Gravity Model ◽  
Trade Diversion ◽  
Minor Effect ◽  
Trade Creation ◽  
Customs Union ◽  
Eurasian Economic Union ◽  
Model Evidence ◽  
Economic Union ◽  
A Minor ◽  
Block Trade

The purpose of this study is to analyze trade creation and trade diversion effects in the Eurasian Economic Union (EEU), which is an evolution of regional trade agreements. The research will analyze intra-block trade flows and test trade creation and diversion in EEU determined by customs union agreements. Gravity model has been applied to annual bilateral export flows for EEU countries paired with a sample of 58 partner countries in the period of 2005-2016, using augmented gravity model with panel year fixed effect, this paper analyzes trade creation and diversion effects of EEU in general. The results are similar to other identical studies and suggest that EEU is mostly trade-diverting with a minor effect of trade creation.

scholarly journals Assessing economic development through trade relations and educational markets integration (the case of Vietnam within ACFTA)

2020 ◽  
Vol 210 ◽  
pp. 13016
Author(s):  
Thinh Bui Tien ◽  
Hung Tran Van
Keyword(s):  
Trade Deficit ◽  
Trade Diversion ◽  
Trade Creation ◽  
Trade Relations ◽  
Full Effect ◽  
Trading Partners ◽  
Trade Center ◽  
Trade Partner ◽  
The Impact ◽  
Positive Effect

This paper applies the gravity model of trade with panel database to assess the impact of ACFTA on the export and import of ACFTA’s members from 2001 to 2018. The database was taken from World Bank Database, International Trade Center and CEPII Research and Expertise on The World Economy. The estimation results review that ACFTA has positive trade creation and trade diversion effect on the export of all ACFTA’s members including Vietnam, ACFTA does play a pivotal role in the intra – regional export and extra – regional export of Vietnam and other ACFTA’s members. Furthermore, within the scope of the paper, compared to other FTA of ASEAN, the magnitude of trade creation of ACFTA is considerably large. This is consistent with the fact that China is gradually becoming a fundamental trade partner with ASEAN and Vietnam in particular. Contrary to the positive effect of ACFTA on members’ export, the estimation results show that ACFTA is causing negative trade diversion effect on the import of ASEAN members within ACFTA including Vietnam. This is in line with the fact that ASEAN and Vietnam in particular have been running trade deficit with China since 2010 at the expense of import from other trading partners, and the trade deficit has been increasing since ACFTA came into full effect.

scholarly journals TRADE CREATION DAN TRADE DIVERSION ANTARA INDONESIA DAN NEGARA-NEGARA ASEAN-KOREA

2018 ◽  
Vol 3 (1) ◽  
pp. 64-81
Author(s):  
Tresna Ritaningsih ◽  
Dedi Budiman Hakim ◽  
Sahara Sahara
Keyword(s):  
Free Trade ◽  
Regional Integration ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Diversion ◽  
Trade Agreements ◽  
Trade Creation ◽  
Implementation Phase ◽  
Trading Partners ◽  
The Impact

Indonesia has several free trade agreements with trading partners that aimed to eliminate tariff and non tariff trade barriers. One of the free trade agreements is ASEAN-Korea FTA. Trade agreement in goods in ASEAN-Korea FTA was agreed since 2007 and now it is entering the implementation phase. The objective of this research is to determine whether the ASEAN-Korea FTA would increase the trade flows between Indonesia and ASEAN-Korea’ countries by analyzing the impact of regional integration on trade creation and trade diversion. This research is utilized balance panel data including 13 countries from 1998-2012. The empirical result shows that all Indonesia's trading sectors experienced decline because of trade diversion and trade creation does not occur. Indonesia's import trading with the non-member countries of ASEAN-Korea is 68% lower than the existing trading. Key word: trade creation, trade diversion, free trade agreement, trade in goods

An application of the SMART model to assess impacts of the EVFTA on Vietnam's imports of automobiles from the EU

2017 ◽  
Vol 33 (2) ◽  
Author(s):  
Huong Vu Thanh
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Diversion ◽  
Market Analysis ◽  
Uneven Distribution ◽  
Trade Creation ◽  
Simulation Results ◽  
The Eu

This paper assesses the potential impacts of the European - Vietnam Free Trade Agreement (EVFTA) on Vietnam's imports of automobiles from the EU by adopting the Software on Market Analysis and Restrictions on Trade (SMART) based on two scenarios. The simulation results reveal that the EVFTA would result in a significant increase in Vietnam's automobile imports from the EU, implying that the EU would be still among the biggest car sources for Vietnam in the upcoming time. However, when Vietnam extends its coverage of tariff elimination to also ASEAN+3, the reduction in Vietnam's automobile imports from the EU would be considerable. Another important finding is that an uneven distribution in Vietnam’s additional automobile imports from the EU by nation, automobile group and automobile product would occur when the EVFTA comes into effect. In both scenarios, trade creation effects are higher than trade diversion effects and hence, the EVFTA could raise welfare of Vietnam. Based on these results, the paper ends by drawing out some implications for the Vietnamese government and domestic enterprises to be better prepare for the upcoming ambitious EVFTA.

scholarly journals Does AFTA Create or Divert Trade?

2007 ◽  
Vol 7 (4) ◽  
pp. 1850122 ◽  
Author(s):  
Helen Cabalu ◽  
Cristina Alfonso
Keyword(s):  
Trade Liberalization ◽  
Free Trade ◽  
Free Trade Area ◽  
Trade Diversion ◽  
Trade Creation ◽  
Commodity Trade ◽  
Trade Patterns ◽  
Trade Data ◽  
Trade Area ◽  
The Impact

In this article the changes in trade patterns introduced by the ASEAN Free Trade Area (AFTA) are examined. Variation in growth trends and the shift-and-share methodology are used to identify the impact of trade liberalization under AFTA on intra- and extra-regional commodity trade. Data at the commodity level are used and the results indicate that AFTA had trade creation effects, with little evidence of trade diversion.

scholarly journals The Impact of NAFTA on the United States

2001 ◽  
Vol 15 (1) ◽  
pp. 125-144 ◽  
Author(s):  
Mary E Burfisher ◽  
Sherman Robinson ◽  
Karen Thierfelder
Keyword(s):  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Diversion ◽  
The United States ◽  
Trade Creation ◽  
Policy Debate ◽  
Trade Data ◽  
The North ◽  
The Impact ◽  
The U.S

We describe the main economic arguments posed for and against the North American Free Trade Agreement (NAFTA) during the U.S. policy debate. To evaluate these arguments, we analyze recent trade data and survey post-NAFTA studies. We find that both the U.S. and Mexico benefit from NAFTA, with much larger relative benefits for Mexico. NAFTA also has had little effect on the U.S. labor market. These results confirm the consensus opinion of economists at the time of the debate. Finally, studies find that trade creation greatly exceeds trade diversion in the region under NAFTA, especially in intermediate goods.

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