Effects of Regional Trade Agreements on Trade in Agrifood Products: Evidence from Gravity Modeling Using Disaggregated Data |
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| Authors: | Sampath Jayasinghe Rakhal Sarker |
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| Institution: | Sampath Jayasinghe is a doctoral candidate in the Department of Economics and a research assistant at the Center for Agricultural and Rural Development, Iowa State University.;
Rakhal Sarker is an associate professor in the Department of Food, Agricultural and Resource Economics, University of Guelph, Ontario, Canada |
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| Abstract: | The recent proliferation of regional trade agreements (RTAs) has intensified the debate on their merits. This study contributes to this debate by analyzing trade creation and diversion effects of the North American Free Trade Agreement (NAFTA) on trade in six important agrifood products. An extended gravity model is estimated using pooled data and generalized least squares methods. The result shows that the share of intraregional trade is growing within NAFTA and that NAFTA has displaced trade with the rest of the world. While NAFTA has served to boost trade among its members, it reduced the degree of openness to trade with nonmembers. |
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