Trade Agreements Trade Liberalization

There is considerable evidence that more outward-looking countries tend to grow faster than inward-looking countries.2 It is recognized that the benefits of trade liberalization can exceed the costs that their economies have opened up in recent years by more than 10.3 times, including India, Vietnam and Uganda. , and have experienced faster growth and greater poverty reduction.4 On average, countries that have opened their economies, including India, Vietnam and Uganda, have experienced faster growth and greater poverty reduction, including India, Vietnam and Uganda. Countries that have opened their economies, including India, Vietnam and Uganda, have experienced faster growth and more poverty reduction.4 On average, countries that have opened their economies in recent years, including India, Vietnam and Uganda, have experienced faster growth and more poverty, developing countries that significantly reduced tariffs in the 1990s have grown faster than countries have increased faster than countries. developing in the 1990s. Who have not.5 But progress has been slower for many other countries, especially in Africa and the Middle East. In the poorest countries, their share of world trade has declined considerably and, without reducing their own trade barriers, they are at risk of further marginalizing. Approximately 75 development and transformation economies, including virtually all least developed countries, fit this description. Unlike successful integrators, they are disproportionately dependent on the production and export of traditional raw materials. The reasons for their marginalization are complex, including deep structural problems, weak political framework and institutions, and protection inside and outside. One of the visionary proposals for world trade is the Asia-Pacific Free Trade Agreement (FTAAP). Based on these results, FTAAP would increase trade in most Asia-Pacific countries by about 50%.

The result is an increase in two-way merchandise trade for the United States of nearly $1,200 billion, an increase of nearly $600 billion for China and nearly $900 billion for Japan. The FTAAP, if implemented one day, could increase trade in two goods along the way across the region by $4.8 trillion. Among the major countries, the impact on China would be the smallest in percentage terms and the impact on Japan would be the greatest. To save space, we do not present the disaggregated results here, but we focus on the overall results of the calculations dissected in Hufbauer and Schott (2007). Table 2 shows the estimated effects of current and potential preferential trade agreements on domestic or “insider” trade in some countries and regions of the Asia-Pacific region. In a first move to the important question, we did our own gravity modeling analysis using the APC approach. Due to data constraints, we were unable to accurately replicate the APC econometric method; So we used our own data set and used econometric techniques that actually include the APC method. However, our methodology lacks an important element of the APC approach: an index that distinguishes preferential trade agreements according to their comprehensiveness. On the other hand, our coverage of merchandise flows and preferential trade agreements is broader than the APC dataset.

The DeRosa (2007) dataset covers 30 years (1970-1999), 156 countries and 46 preferential trade agreements compared to the APC dataset that covered 28 years (1970-1997), 116 countries and 16 preferential trade agreements. Recent work by Hufbauer and Schott (2007), based on additional econometric work by DeRosa, analyzes nine PTA groups covering some 560 individual preferential trade agreements. The Hufbauer and Schott study extended the panel data to a more recent period (1976-2005) and covered 179 countries. What are the incentives for governments to negotiate “new trade agreements”, i.e. agreements that do not only restrict government decisions on the