Effects of Regional Trade Agreements on Trade in Agrifood Products: Evidence from Gravity Modeling Using Disaggregated Data

The recent proliferation of regional trade agreements (RTAs) has intensified the debate on their merits. This study contributes to this debate by analyzing trade creation and diversion effects of the North American Free Trade Agreement (NAFTA) on trade in six important agrifood products. An extended...

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Bibliographic Details
Published in:Applied economic perspectives and policy 2008-04, Vol.30 (1), p.61-81
Main Authors: Jayasinghe, Sampath, Sarker, Rakhal
Format: Article
Language:English
Subjects:
Agriculture
Agrifood industry
Applied Analyses
Coefficients
Commodities
Data analysis
F130
F150
Food processing industry
Free trade
Gravity models
Gross domestic product
International trade
L660
Meats
North American Free Trade Agreement
O190
Q170
Regional trade pacts
Studies
Trade
Trade regionalization
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Summary:The recent proliferation of regional trade agreements (RTAs) has intensified the debate on their merits. This study contributes to this debate by analyzing trade creation and diversion effects of the North American Free Trade Agreement (NAFTA) on trade in six important agrifood products. An extended gravity model is estimated using pooled data and generalized least squares methods. The result shows that the share of intraregional trade is growing within NAFTA and that NAFTA has displaced trade with the rest of the world. While NAFTA has served to boost trade among its members, it reduced the degree of openness to trade with nonmembers.
ISSN:1058-7195
2040-5790
1467-9353
2040-5804
DOI:10.1111/j.1467-9353.2007.00392.x