Terms-of-Trade Impacts of Trade Agreements and the Choice of Trade Policy

Joachim Jarreau

Working Papers from HAL

Abstract: This paper studies the impacts and determinants of trade policy. I use data on applied tariff protection of world countries over 2001-2007 to estimate sector-level trade elasticities. I then calibrate a structural gravity model of world trade. I compute the impacts of trade agreements which were implemented and of those which were not. I find that expected real income gains predict the signing of PTAs. Decomposing these gains shows that domestic mill price increases, reflecting market access gains, have a larger impact than the impact on the consumer price index. I also find that larger expected gains from multilateral liberalization reduce the probability to engage in preferential agreements.

Keywords: counter-factual estimation; international trade; preferential trade agreements; trade creation and diversion (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-int
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Working Paper: Terms-of-Trade Impacts of Trade Agreements and the Choice of Trade Policy (2014)
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