On the Trade-diversion Eﬀects of Free Trade Agreements
Yoto Yotov and
Thomas Zylkin ()
No 2013-3, School of Economics Working Paper Series from LeBow College of Business, Drexel University
Standard trade theory suggests that Free Trade Agreements (FTAs) could disrupt trade between members and non-members. However, the trade diversion eﬀects of FTAs have not been thoroughly examined empirically. Using a novel empirical approach, we conﬁrm that FTAs that entered into force during the 1990s diverted trade away from non-member countries. Interestingly, we ﬁnd that diversion from internal trade due to FTAs was signiﬁcantly stronger than diversion from external trade.
Keywords: International Trade; Gravity; Free Trade Agreements; Trade Diversion (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2013-08-16, Revised 2014-09-15
New Economics Papers: this item is included in nep-cwa
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Persistent link: https://EconPapers.repec.org/RePEc:ris:drxlwp:2013_003
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