Do nonreciprocal preferential trade agreements increase beneficiaries' exports?

Gil‐Pareja, Salvador; Llorca‐Vivero, Rafael; Martínez‐Serrano, José Antonio

doi:10.1016/j.jdeveco.2014.01.002

Cited by 60 publications

(60 citation statements)

References 35 publications

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“…The gravity model for trade is probably one of the most successful empirical applications in international economics and has been used profusely, since the pioneering article by Tinbergen (1962), to analyse aspects of great importance such as: the impact on trade of the GATT/WTO system (Rose, 2004); regional trade agreements (Baier & Bergstrand, 2007); non-reciprocal trade agreements (Gil-Pareja et al, 2014); exchange rate systems (Klein & Shambaugh, 2006); or monetary unions (Rose, 2000).…”

Section: Introductionmentioning

confidence: 99%

The internationalisation of the Spanish food industry: the home market effect and European market integration

Serrano

García-Casarejos

Gil‐Pareja

et al. 2015

Span. j. agric. res.

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The objective of this study was to analyse, from a long-term perspective, the factors determining the process of the internationalisation of the Spanish agrifood industry. The paper concentrates on the empirical verification of the existence of a home market effect in the food and drink industries in Spain and on the effects on trade flows of integration into the European Union. With this aim in mind, we took into account the latest contributions to the estimation of the gravity equation for a sample of export flows from 13 agrifood subsectors between 1970 and 2012, with a destination of 175 markets. From the results of the study the existence of the "home market effect" stands out as the determining factor of the increasing process of internationalisation in the majority of the subsectors of the food industry. On this point, the presence of this effect is remarkable in the most dynamic industries, where the process of restructuring caused by the development of the internal market was more intense. Furthermore, the influence of the process of European integration has been shown by the literature to be a very important factor. Our results qualify in part the results of previous studies, since the positive effect appeared later than expected. The positive effects did not appear until the completion of the process of transition by the dismantling of the barriers established in the treaty of accession to the European Union.

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Section: Introductionmentioning

confidence: 99%

The internationalisation of the Spanish food industry: the home market effect and European market integration

Serrano

García-Casarejos

Gil‐Pareja

et al. 2015

Span. j. agric. res.

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“…Another study covering all LDCs concludes that the EBA has not had a positive effect on the export performance of EBA beneficiaries (Gradeva & Martínez‐Zarzoso, ). Our work is in particularly close to that of Gil‐Pareja, Llorca‐Vivero, and Martínez‐Serrano () which studies the impact of non‐reciprocal policies on aggregate trade, but their paper includes all NRPTAs and the general GSPs from developed countries. Also, their study does not address separately the trade impact of EBA and AGOA on beneficiary countries.…”

Section: A Literature Reviewmentioning

confidence: 68%

“…For the AGOA and the EBA, which includes all LDCs, they find a positive effect. However, as their study sample covers a period from 1960 to 2008, and as AGOA and EBA are in force only since 2001, Gil‐Pareja et al () assessed only the impact of AGOA and EBA over a relatively short time horizon and is not in a position to assess whether the benefits survived the erosion of preferences.…”

Section: A Literature Reviewmentioning

confidence: 99%

“…To correct this bias, several methods may be used: (a) the instrumental variable method with a two‐stage estimation (e.g. Chen & Ravallion, ; Magee, ), but this method requires finding plausible and significant instrumental variables; (b) the matching method (Baier & Bergstrand, ; Smeets & Warzynski, ); (c) the difference‐in‐differences matching (Egger, Egger, & Greenaway, ; Girma and Görg, ); (d) Heckman control function method or Helpman, Melitz, and Rubinstein () method (here, the problem is to determine the “exclusive variable”); and (e) the fixed‐effects method (Coulibaly, ; Gil‐Pareja et al, ). Many researchers implement the gravity equation with EIA dummy variables and fixed effects to find consistent and precise empirical estimates of the average treatment effect of EIAs on trade flows (Anderson & Yotov, ; Head & Mayer, ; Eicher, Henn, & Papageorgiou, ).…”

Section: A Literature Reviewmentioning

confidence: 99%

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Assessing the impact of unilateral trade policies EBA and AGOA on African beneficiaries' exports using matching econometrics

Sorgho

Tharakan

2019

World Economy

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The existing literature studying the impact of non‐reciprocal preferential trade agreements (NRPTAs) assumes implicitly NRPTAs are non‐randomly assigned without showing the evidence of that. Using a matching methodology, this paper investigates whether the “African Growth and Opportunity Act” (AGOA) and the “Everything But Arms” (EBA) unilateral trade concessions have had an impact, and in what magnitude, on the exports of African beneficiary countries in the light of the evidence of the non‐random nature (endogeneity) of NRPTAs. Methodologically, previous studies using the matching procedure focused on bi or multilateral trade agreements. Our work focuses on NRPTAs that depend only on donors' conditions. Accordingly, we show that for NRPTAs, gravity covariates cannot be used for the matching procedure. We propose to use political variables as determinants for obtaining non‐reciprocal trade preferences in order to address the endogenous nature of NRPTA assignment. Our main results confirm that a country becomes eligible for a NRPTA only when it meets certain conditions, defined by their donors, such as political stability and economic regulation (for AGOA), and freedom of expression and human development (for EBA). Results also show that both AGOA and EBA policies have had a positive impact on African beneficiary countries' exports to NRPTA's providers, even if the magnitude impact of EBA is significantly lower than that of AGOA.

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“…Indeed, the products and sectors where developing countries would benefit the most from better foreign market access tend to be the least open in advanced economies. 43 On the empirical side, evaluating the impact of SDT as a whole is challenging, as isolating its effects is typically unfeasible. An option is to compare the behavior of similar countries that joined the GATT/WTO system before and after the UR.…”

Section: Answering the Main Questionsmentioning

confidence: 99%

Special and Differential Treatment for Developing Countries

Ornelas¹

2015

The Regulation of International Trade

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Special and Differential Treatment for Developing Countries (SDT) constitutes a central feature of the GATT/WTO system. Its formal goal is to foster export-led growth in developing countries. Its theoretical foundations and empirical support are, however, weak at best. In particular, SDT conflicts with the GATT's two key principles of reciprocity and non-discrimination, compromising the efficiency of the multilateral trading system. Still, if SDT provisions help those who most need help, sacrificing economic efficiency may be justifiable. However, there are numerous criticisms, on theoretical and empirical grounds, to the premises and the achievements of SDT-based disciplines, casting serious doubt on its effectiveness in helping developing countries trade and grow. For researchers, the good news is that there is plenty of room for progress, with several important areas where our understanding remains unsatisfactory but progress is feasible---that is, where the expected return to research effort seems unusually high.

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Do nonreciprocal preferential trade agreements increase beneficiaries' exports?

Cited by 60 publications

References 35 publications

The internationalisation of the Spanish food industry: the home market effect and European market integration

The internationalisation of the Spanish food industry: the home market effect and European market integration

Assessing the impact of unilateral trade policies EBA and AGOA on African beneficiaries' exports using matching econometrics

Special and Differential Treatment for Developing Countries

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