CEPII, Recherche et Expertise sur l'economie mondiale
Do Regional Trade Agreements Really Boost Trade? Estimates for Agricultural Products


Sébastien Jean
Jean-Christophe Bureau

 Highlights :
  • We document precisely liberalization patterns for 74 regional trade agreements (RTAs), over the period 1998-2009, for the agricultural and food sector
  • The mean elasticity of substitution across imports at the product level is estimated to be slightly below 4
  • RTAs have increased bilateral agricultural and food exports between partners by 30% to 40% on average
  • RTAs increase the probability to export a given a product to a partner country, but this impact is estimated to be lesser than one percentage point on average

 Abstract :
The trade effects of tariff preferences are assessed using difference-in-differences panel estimations, whereby exports to third destinations and imports from third origins are used as benchmarks. The method is applied at a detailed product level for 74 agreements, over the period 1998-2009, for the agricultural and food sector. We estimate the mean elasticity of substitution across imports at the product level to be slightly below 4, with significant but limited differences across types of agreements and level of preferential margin. Counterfactual simulations suggest that RTAs have increased bilateral agricultural and food exports between partners by 30% to 40% on average, with a marked heterogeneity across agreements. RTAs are also found to increase the probability to export a given a product to a partner country, but this impact is estimated to be lesser than one percentage point on average.

 Keywords : regional trade agreement | international trade | agricultural products | tariff protection

 JEL : F13, Q17
CEPII Working Paper
N°2015-09, June 2015

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 Domaines d'expertise

Commerce & Mondialisation
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