scholarly journals Diversion et création d’échanges commerciaux dans le cadre du système canadien de préférences tarifaires

2009 ◽  
Vol 55 (1) ◽  
pp. 68-81
Author(s):  
Jaleel Ahmad
Keyword(s):  
Developing Countries ◽  
Product Category ◽  
Trade Diversion ◽  
Trade Flows ◽  
Trade Creation ◽  
Customs Union ◽  
Major Conclusion ◽  
Usual Assumption ◽  
Trade Preferences ◽  
Perfect Substitution

This paper explores in quantitative terms the potential effects on trade flows as a result of Canadian tariff preferences in favor of the developing countries instituted in 1974. The paper develops a model of trade creation and trade diversion due to preferences based on imperfect substitution, within each product category, between preference-granting, preference-receiving and non-preferred countries. This model depart from the usual assumption of the customs union theory that countries trade in perfect substitutes. The model is then applied to the 1978 trade date under BTN chapters 25 - 99 on a 4-digit classification. One major conclusion of the paper is that the assumption of perfect substitution tends to overstate the magnitude of trade creation and trade diversion, while the method based on less than perfect substitutability seems to offer more realistic estimates of the actual impact of trade preferences.

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 A Trade and Welfare Analysis of Tariff Changes Within the TPP

2016 ◽  
Vol 16 (1) ◽  
pp. 477-511 ◽  
Author(s):  
Juyoung Cheong ◽  
Shino Takayama
Keyword(s):  
Welfare Analysis ◽  
Trade Diversion ◽  
Trade Flows ◽  
Trade Creation ◽  
Welfare Gains ◽  
The World ◽  
Positive Externality ◽  
Tariff Reductions ◽  
Sectoral Linkages

Abstract This paper examines the effects of the Trans-Pacific Partnership (TPP) tariff reductions on trade flows and welfare of the TPP members and nonmembers following the Caliendo and Parro (2015) method. We use comprehensive sectoral data on 39 countries and the rest of the world, including those in the Association of Southeast Asian Nations (ASEAN) and the Organization for Economic Co-operation and Development (OECD). Our results show that many TPP nonmembers along with the TPP members gain from the TPP tariff reductions, suggesting the existence of a positive externality, with the welfare gains mainly arising from the changes in the terms of trade. Our analysis also shows that the TPP members increase their imports from other TPP members and decrease from non-TPP members, but the trade creation effects exceed the trade diversion effects. Our calibration results under various assumptions of the model emphasize the role of multiple sectors and sectoral linkages in the welfare analysis of the TPP tariff reductions.

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 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 The Trade Effects of a South Asian Customs Union: An Expository Study

1981 ◽  
Vol 20 (1) ◽  
pp. 61-80 ◽  
Author(s):  
M. Akhlaqur Rahman ◽  
Ayubur Rahman Bijuyan ◽  
Sadrel Reza
Keyword(s):  
Sri Lanka ◽  
South Asian ◽  
Trade Diversion ◽  
Trade Creation ◽  
Customs Union ◽  
Asian Countries ◽  
Trade Effects

The paper estimates the static trade effects of a customs union comprising Bangladesh, India, Nepal. Pakistan and Sri Lanka. Although these effects arc found to vary between countries, for the region as a whole the trade-creation effects appear to be greater than the trade-diversion effects. Despite their smallness, the direct ion of the change indicated by the static results seems encouraging to possible attempts at the formation of a customs union among South Asian countries.

scholarly journals Winners and Losers in Customs Unions: An Experimental Investigation

2011 ◽  
Vol 2 (2) ◽  
pp. 49-72
Author(s):  
Baboo M Nowbutsing
Keyword(s):  
Comparative Advantage ◽  
Trade Diversion ◽  
Careful Consideration ◽  
Terms Of Trade ◽  
Trade Flows ◽  
Customs Union ◽  
Trade Effect ◽  
Customs Unions ◽  
The World ◽  
Ricardian Model

In the context of a Competitive Ricardian Model (CRM), one can ask whether it is possible to relate winners and losers from a CU based on comparative advantage considerations. This was pursued by Venables (2003), who showed that careful consideration of a country’s comparative advantage – with the rest of the world relative to that with its partners in the CU- yields predictions about winners and losers. Starting from initial tariff equilibrium, in a 3 country model with a continuum of goods, he shows that a country with ‘extreme’ comparative advantage will be more vulnerable to trade diversion. In this experiment, the 3 x 3 Competitive Ricardian Model (CRM) in two scenarios multiple import tariffs and a customs union. We fully characterise the equilibrium under both. Starting from a tariff distorted situation, we find that when a customs union is formed there is an increase in trade flows among members; a rise in individual consumption of some goods; a clear terms of trade effect and the existence of trade diversion. Our experimental results support the simulation findings of Venables (2003), who showed that countries which have ‘extreme’ comparative advantage in a customs union will generally be more vulnerable to trade diversion.

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.

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