The Impact of Regional Trade Agreements on Trade in Agricultural Products [E-Book] / Jean Christophe Bureau and Sebastien Jean
Bureau, Jean Christophe.
Jean, Sebastien.
Paris : OECD Publishing, 2013
32 p. ; 21 x 29.7cm.
OECD Food, Agriculture and Fisheries Papers ; 65
Agriculture and Food
Full Text
Trade flows are significantly affected by the trade agreements both with respect to impacts on pre-existing trade flows, (intensive margin) and on new, previously non-existent trade flows (extensive margin). The effect of the Regional Trade Agreements on pre-existing trade flows are found to be significant with a mean elasticity of substitution at the product level of about 2 so that a 1% preferential margin increases trade by only 2% on average. Total bilateral exports are found to be increased by 18% on average for products benefiting from a preferential margin between 5 and 10%, and by 48% for products where the margin exceeds 10%. The effect of an RTA agreement on extensive margin is to increase the probability to export a given a product to a partner country by one percentage point on average. Furthermore preferential margins, as measured through their impact on tax-inclusive consumer prices, nearly double within eight years of entry into force rising from 4.7% to 8.9% on average.