Quantitative Evidence on Transparency in Regional Trade Agreements

Iza Lejárraga and Ben Shepherd
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Iza Lejárraga: OECD

No 153, OECD Trade Policy Papers from OECD Publishing

Abstract: What influences the adoption of transparency obligations in trade agreements, and what are its effects? This paper uses a new dataset on transparency provisions in over a hundred regional trade agreements (RTAs) to provide empirical evidence of the political economy determinants of international transparency commitments, as well as the trade impact of negotiating such transparency provisions in RTAs. The study finds that RTAs with deeper mechanisms for enhancing transparency appear to be more strongly trade-promoting than those with shallower commitments on transparency. Concretely, each additional transparency commitment negotiated in an RTA is associated with an increase in bilateral trade flows of more than one percent. Considering that comprehensive RTAs typically contain a dozen of such commitments, countries that opt for a comprehensive transparency agenda can expect to gain substantial increases in intra-regional trade. Moreover, the findings suggest that the readiness of trading partners to adhere to transparency norms is influenced by the quality of home institutions, which is consistent with a view that strengthening governance and regulatory capacities can contribute to a broader diffusion of transparency practices in international trade. Overall, the results of the analysis suggest that transparency should remain an important element of the trade agenda, both at the regional and multilateral levels.

Keywords: anti-corruption; free trade agreements; FTAs; governance; gravity model of trade; institutions; preferential trade agreements; PTAs; regional trade agreements; regulatory cooperation; regulatory quality; RTAs; trade; transparency; World Trade Organisation; WTO (search for similar items in EconPapers)
JEL-codes: F1 F10 F13 F15 (search for similar items in EconPapers)
Date: 2013-06-14
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:153-en

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