The Importance of Deep Integration in Preferential Trade Agreements: The Case of a Successfully Implemented Ukraine-Turkey Free Trade Agreement

2020 ◽  
Author(s):  
Veronika Movchan ◽  
Thomas Rutherford ◽  
David G. Tarr ◽  
Hidemichi Yonezawa
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Preferential Trade ◽  
Deep Integration

scholarly journals Essays on the interaction between multilateral tariff bindings and the formation of preferential trade agreements

2021 ◽  
Author(s):  
Nken Moise
Keyword(s):  
Free Trade ◽  
Comparative Advantage ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Free Riding ◽  
Preferential Trade Agreements ◽  
Customs Union ◽  
Preferential Trade ◽  
High Tariff ◽  
The Impact

This dissertation studies the effect of continual reduction in the tariff bindings and its implications on the static and dynamic formation of preferential trade agreements (PTAs). Underlying trade model is a three country \competing exporters" model. First, utilizing a static game of endogenous trade agreement formation between three countries, we examine the effects of continual reduction in tariff bindings on the role of PTA formation in attaining global free trade. We show that, in the free trade agreement (FTA) formation game, when countries are completely symmetric, free trade always obtains as the coalition-proof Nash equilibrium (CPNE) of the FTA game. Under the customs union (CU) game, CU members exercise an exclusion incentive and free trade fails to be a CPNE. When countries are asymmetric with respect to their comparative advantage, the country with a weaker comparative advantage has an incentive to free ride on trade liberalization of the two others and continual reduction in tariff bindings facilitates FTA formation in attaining global free trade. Next, we employ a three country dynamic model of PTA formation where countries form PTAs over time and investigate the impact of multilateral tariff binding liberalization on the equilibrium extent of FTA and CU formation in isolation. When forming FTAs under relatively high tariff bindings, a myopic free riding incentive of FTA non-members constrains FTA formation. Thus, tariff binding liberalization can facilitate FTA expansion to global free trade. However, when forward looking countries do not value this myopic free riding incentive, tariff binding liberalization can impede FTA expansion to global free trade. In our CU game, CU formation proceeds to global free trade only for relatively high tariff bindings. Finally, we examine the PTA game where countries endogenously choose between CU and FTA formation. Under such a game, we show that the equilibrium emergence of CUs can prevent global free trade that would otherwise occur through FTAs. In contrast, the equilibrium emergence of FTAs can facilitate global free trade that would otherwise not occur through CUs.

scholarly journals The Impact of NAFTA on Australia’s Trade and the Implications of Preferential Trade

2016 ◽  
Vol 2 (1) ◽  
pp. 78-84
Author(s):  
Jarrad Marthaller
Keyword(s):  
United States ◽  
Free Trade ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The United States ◽  
Preferential Trade Agreements ◽  
Preferential Trade ◽  
Trade Relations ◽  
Strong Relation ◽  
The Impact

This article will be exploring and evaluating trade relations between Australia and The United States of America, with a particular focus on the effects of NAFTA (North American Free Trade agreement) on the amount of trade between these two countries. I used trade data available over a narrow span of several decades in order to create several tables that document the change in volume of trade between Australia and The United States in an attempt to demonstrate that NAFTA and Preferential Trade Agreements in general run contrary to the principles of free trade that the World Trade organization espouses. By showing a strong relation between a downturn in the demand for Australian exports and the timing of the NAFTA’s signing, I show that Preferential Trade Agreements such as NAFTA and more recently, the Trans-Pacific Partnership may be leading to protectionist regional blocs.

scholarly journals Essays on the interaction between multilateral tariff bindings and the formation of preferential trade agreements

2021 ◽  
Author(s):  
Nken Moise
Keyword(s):  
Free Trade ◽  
Comparative Advantage ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Free Riding ◽  
Preferential Trade Agreements ◽  
Customs Union ◽  
Preferential Trade ◽  
High Tariff ◽  
The Impact

This dissertation studies the effect of continual reduction in the tariff bindings and its implications on the static and dynamic formation of preferential trade agreements (PTAs). Underlying trade model is a three country \competing exporters" model. First, utilizing a static game of endogenous trade agreement formation between three countries, we examine the effects of continual reduction in tariff bindings on the role of PTA formation in attaining global free trade. We show that, in the free trade agreement (FTA) formation game, when countries are completely symmetric, free trade always obtains as the coalition-proof Nash equilibrium (CPNE) of the FTA game. Under the customs union (CU) game, CU members exercise an exclusion incentive and free trade fails to be a CPNE. When countries are asymmetric with respect to their comparative advantage, the country with a weaker comparative advantage has an incentive to free ride on trade liberalization of the two others and continual reduction in tariff bindings facilitates FTA formation in attaining global free trade. Next, we employ a three country dynamic model of PTA formation where countries form PTAs over time and investigate the impact of multilateral tariff binding liberalization on the equilibrium extent of FTA and CU formation in isolation. When forming FTAs under relatively high tariff bindings, a myopic free riding incentive of FTA non-members constrains FTA formation. Thus, tariff binding liberalization can facilitate FTA expansion to global free trade. However, when forward looking countries do not value this myopic free riding incentive, tariff binding liberalization can impede FTA expansion to global free trade. In our CU game, CU formation proceeds to global free trade only for relatively high tariff bindings. Finally, we examine the PTA game where countries endogenously choose between CU and FTA formation. Under such a game, we show that the equilibrium emergence of CUs can prevent global free trade that would otherwise occur through FTAs. In contrast, the equilibrium emergence of FTAs can facilitate global free trade that would otherwise not occur through CUs.

The Turkey-UK Free Trade Agreement in Terms of Economic Diplomacy

2021 ◽  
Vol 23 (Fall 2021) ◽  
pp. 193-211
Author(s):  
Kaan Yiğenoğlu
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Bilateral Trade ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The European Union ◽  
Economic Relations ◽  
Economic Diplomacy ◽  
The Uk

This article scrutinizes relations between economic diplomacy and free trade agreements by focusing on the Turkey-UK free trade agreements which came into force in 2021. Accordingly, the article first introduces the concept of economic diplomacy, an important issue as it has been shown that bilateral trade agreements, nowadays preferred by many countries, can be used as a tool of economic diplomacy. The article then discusses the history and development of free trade agreements signed by Turkey, including its long-running experience of economic integration with the European Union. Although Turkey began establishing free trade agreements in the 1990s, it has been concentrating on and accelerating its use since 2000. Based on economic and political reasons underlying the free economic agreements, the reasons why Turkey and the UK have reached such an agreement are summarized. Economic relations between the two countries are then analyzed and the details of the agreement are investigated in the context of the changes that it provides.

scholarly journals The ASEAN Free Trade Agreement and Vietnam’s Trade Efficiency

2017 ◽  
Vol 13 (4) ◽  
pp. 192 ◽  
Author(s):  
Hai Thi Hong Nguyen ◽  
Thang Ngoc Doan
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Free Trade Agreements ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Trade Volume ◽  
Large Space ◽  
Trading Partners ◽  
Efficiency Performance ◽  
Stochastic Gravity

This study employs a stochastic gravity model to estimate the efficiency performance of Vietnam’s trade with its main trading partners from 1995-2015. Trade efficiency is measured as the ratio of actual trade volume to the maximum likelihood. Moreover. it analyzes the effects of both natural and man-made trade barriers on trade efficiency. The empirical results suggest that the actual trade of Vietnam appears to be much smaller than a possible efficiency level and that there is large space for further progress. Export efficiency outweighs that of import. Vietnam’s ASEAN Free Trade Agreement membership has, in general, improved the trade efficiency, whereas tariffs and domestic devaluation have impaired it. Our findings lead to the recommendation that Vietnam should join more Free Trade Agreements and break down the man-made barriers.

Endogenous Preferential Trade Agreements: An Empirical Analysis

2003 ◽  
Vol 2 (1) ◽  
Author(s):  
Christopher S Magee
Keyword(s):  
Political Economy ◽  
Empirical Analysis ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
The Political ◽  
Preferential Trade ◽  
Trading Partners ◽  
Regional Agreements

Abstract This paper provides one of the first assessments of the hypothesis that two countries are more likely to form a preferential trade agreement (PTA) if they are already major trading partners. The paper also tests a number of predictions from the political economy literature about which countries are expected to form regional agreements. The results show that countries are more likely to be preferential trading partners if they have significant bilateral trade, are similar in size, and are both democracies. Finally, the paper measures the effect of preferential agreements on trade volumes while, unlike previous studies, treating PTA formation as endogenous.

Developments Relating to U.S. Trade Negotiations—KORUS, NAFTA, and Trade Promotion Authority

2018 ◽  
Vol 112 (3) ◽  
pp. 510-513 ◽  
Keyword(s):  
Free Trade ◽  
Free Trade Agreement ◽  
Trade Agreement ◽  
Trade Agreements ◽  
The United States ◽  
The North ◽  
Final Agreement ◽  
Trade Promotion ◽  
Trade Deals ◽  
Trump Administration

Consistent with his approach on the campaign trail, President Trump has demonstrated a continued interest in revamping U.S. trade agreements. By the late spring of 2018, the Trump administration had negotiated modest changes to the United States-Republic of Korea Free Trade Agreement (KORUS) in favor of U.S. interests. It had yet to reach any final agreement with regard to the North American Free Trade Agreement (NAFTA), despite the expiration of an initial deadline that was designed to ensure adequate time for a vote on the negotiated agreement by the present Congress. To ease the passage of future trade deals, Trump has triggered the three-year extension of a process that provides expedited congressional consideration of negotiated trade agreements.

Preferential Trade Agreements of the Eurasian Economic Union

2020 ◽  
pp. 29-55
Author(s):  
Maria Lagutina
Keyword(s):  
Free Trade ◽  
Trade Agreements ◽  
Preferential Trade Agreements ◽  
Economic Feasibility ◽  
Free Trade Zone ◽  
Partner Country ◽  
Preferential Trade ◽  
Trade Relations ◽  
Eurasian Economic Union ◽  
Economic Union

One of the trends in the development of modern trade relations is the increase in the number of concluded preferential trade agreements (PTA), which are considered to be a tool for reducing tariffs and, as a consequence, reducing the costs of entering the domestic market of the partner country. Although the Eurasian Economic Union (EAEU) has made only the first steps on the way towards its development. The EAEU has already managed to create a free trade zone with Vietnam, some agreements have been signed with Iran and China. Each of these agreements has its own specifics. The purpose of this chapter is to identify the economic feasibility and political significance of these preferential trade agreements for the countries of the EAEU and their external partners, as well as to determine the potential expansion of the network of preferential trade agreements of the EAEU.

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