The Trade Effects of Preferential Arrangements: New Evidence from the Australia Productivity Commission

Dean DeRosa ()
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Dean DeRosa: ADR International Ltd

No WP07-1, Working Paper Series from Peterson Institute for International Economics

Abstract: This paper critically examines “new” evidence from the gravity model that indicates the majority of preferential trading arrangements (PTAs) today are predominantly trade diverting. This new evidence on trade diversion was presented in a recent Australia Productivity Commission (APC) working paper. Although no major faults are found in the methodology of the APC study, the present analysis finds the opposite conclusion—that the majority of current PTAs are predominantly trade creating—when a variant of the gravity model formulated by Andrew Rose is applied to upto- date regression data using a variety of econometric methods, including the Tobit regression method employed by the APC study.

Keywords: trade policy; preferential trading arrangements; free trade agreements; gravity models (search for similar items in EconPapers)
JEL-codes: F13 F15 F17 (search for similar items in EconPapers)
Date: 2007-01
New Economics Papers: this item is included in nep-ind and nep-int
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:iie:wpaper:wp07-1

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