Citation

Discussion Paper Details

Please find the details for DP2183 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Regionalism in the Nineties: What Effect on Trade?

Author(s): Isidro Soloaga and L. Alan Winters

Publication Date: June 1999

Keyword(s): European Integration, Gravity Model, Regional Integration and Trade Diversion

Programme Area(s): International Trade and Regional Economics

Abstract: The paper applies a gravity model to 1980-1996 annual non-fuel imports data for 58 countries to quantify the effects of recently created or revamped PTAs on trade. We modify the usual gravity equation to identify separate effects of PTAs on intra-bloc trade, members' total imports and their total exports. We also innovate by formally testing the significance of changes in the estimated coefficients before and after blocs' formation. Our estimations show no indication that the 'new wave' of regionalism boosted intra-bloc trade significantly. Regarding trade diversion, we found convincing evidence of it only for EU and EFTA (and for the same blocs also, we observed exports diversion, which would be consistent with their imposing a welfare cost on the ROW). Trade liberalization efforts in Latin America had a positive impact on bloc members' imports (ANDEAN, CACM, LAIA and MERCOSUR), although MERCOSUR's exports decreased in the last part of the sample.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2183

Bibliographic Reference

Soloaga, I and Winters, L. 1999. 'Regionalism in the Nineties: What Effect on Trade?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2183