Reciprocal vs nonreciprocal trade agreements: which have been best to promote exports?

Salvador Gil-Pareja, Rafael Llorca-Vivero and José Antonio Martínez-Serrano
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Rafael Llorca-Vivero: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).
José Antonio Martínez-Serrano: Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).

No 1802, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: The Doha Development Agenda recognizes the central role that international trade can play in the promotion of economic development. In fact, the increase of exports from developing countries to developed nations' markets has been considered a key element for developing countries to realize the potential benefits of globalization. Over the last decades developed countries have provided preferential access to their markets to developing countries through nonreciprocal trade agreements. Moreover, developing countries have also participated in reciprocal trade agreements. This paper investigates comparatively, for the first time, the effect of both kinds of trade agreements on exports from developing countries but also from the developed world. We find that both agreements, but especially the reciprocal agreements, have boosted exports from beneficiary countries to developed countries. Our results give support to the argument raised by critics of nonreciprocal preference regimes who consider that developing countries should abandon their reliance on one-way trade preferences in favor of reciprocal agreements.

Keywords: Preferential trade agreements; Nonreciprocal preferential trade agreements; GATT/WTO; developing countries; exports; gravity equation. (search for similar items in EconPapers)
JEL-codes: F14 (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-int
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