Terms-of-Trade Impacts of Trade Agreements and the Choice of Trade Policy

Joachim Jarreau (1)

1 GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille

This paper studies the impacts and determinants of trade policy. I use data on applied tariff protection of world countries over 2001-2007 to estimate sector-level trade elasticities. I then calibrate a structural gravity model of world trade. I compute the impacts of trade agreements which were implemented and of those which were not. I find that expected real income gains predict the signing of PTAs. Decomposing these gains shows that domestic mill price increases, reflecting market access gains, have a larger impact than the impact on the consumer price index. I also find that larger expected gains from multilateral liberalization reduce the probability to engage in preferential agreements.

Mots clés: counter-factual estimation; international trade; preferential trade agreements; trade creation and diversion

Domaines: Economies et finances

Joachim Jarreau. Terms-of-Trade Impacts of Trade Agreements and the Choice of Trade Policy. 2014. ⟨halshs-01023214⟩