Deep Integration: Considering the Heterogeneity of Free Trade Agreements

Jaime Ahcar and Jean Siroen
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Jaime Ahcar: LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: Regional Trade Agreements have emerged in an environment of stalled multilateral tradenegotiations. Although the impact of Regional Trade Agreements on international tradehas been well documented, scant attention has been paid to empirical studies exploringtheir heterogeneity from the point of view of deep integration. We set out to determinewhether deeper Regional Trade Agreements promote trade more effectively than lessambitious ones. We generate credible deep integration indicators using two recentlyavailable datasets from the World Trade Organization and the World Trade Institute. Wethen test the effect of depth on trade using a gravity model. We treat additive indicatorsas factor variables and use multiple correspondence analysis to obtain distilled indicatorsof deep integration to offer new insights and confirm recent deep integration findings.We find that deeper Regional Trade Agreements increase trade more than shallowagreements do, irrespective of whether the provisions they contain are within or beyondthe competence of the World Trade Organization.

Keywords: Deep Integration; Gravity Model; Regional Trade Agreements; Trade Liberalization; International Trade (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-int and nep-knm
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Published in Journal of Economic Integration, 2017, 32 (3), ⟨10.11130/jei.2017.32.3.615⟩

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Journal Article: Deep Integration: Considering the Heterogeneity of Free Trade Agreements (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01619821

DOI: 10.11130/jei.2017.32.3.615

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