Deep Integration: Considering the Heterogeneity of Free Trade Agreements

Jaime Ahcar and Jean Siroen
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Jaime Ahcar: Pontificia Universidad Javeriana, Cali, Colombia

Journal of Economic Integration, 2017, vol. 32, issue 3, 615-659

Abstract:

Regional Trade Agreements have emerged in an environment of stalled multilateral trade negotiations. Although the impact of Regional Trade Agreements on international trade has been well documented, scant attention has been paid to empirical studies exploring their heterogeneity from the point of view of deep integration. We set out to determine whether deeper Regional Trade Agreements promote trade more effectively than less ambitious ones. We generate credible deep integration indicators using two recently available datasets from the World Trade Organization and the World Trade Institute. We then test the effect of depth on trade using a gravity model. We treat additive indicators as factor variables and use multiple correspondence analysis to obtain distilled indicators of deep integration to offer new insights and confirm recent deep integration findings. We find that deeper Regional Trade Agreements increase trade more than shallow agreements do, irrespective of whether the provisions they contain are within or beyond the competence of the World Trade Organization.

Keywords: Deep Integration; Gravity Model; Regional Trade Agreements; Trade Liberalization; International Trade (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F53 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0722

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