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Regional Trade Agreements and Excluded Countries

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  • Xi He
Abstract
This article investigates the impact of regional trade agreements (RTAs) on excluded countries' protection for agricultural producers. Specifically, this article quantifies the causal impact of an average trading partner's import share from its RTA members, that is preferential import share, on excluded countries' nominal rate of assistance (NRA) to agricultural producers. The empirical analysis is based on a panel dataset that covers fifty‐four agricultural commodities across eighty‐eight countries from 1986 to 2018. Based on an instrumental variables approach that instruments average trading partners' preferential import share with predicted average trading partners' preferential import share constructed from gravity models that assume time‐varying impacts of air and sea distances on trade, I find that a one‐percentage‐point increase in an average trading partner's preferential import share decreases excluded countries' NRA by 0.298 percentage points. The impacts are larger and more significant for net‐importing countries than for net‐exporting countries. Heterogeneity analysis shows that developed countries reduce protection for more protected and subsidized producers, and developing countries reduce protection for less protected and taxed producers. These findings suggest that it's important to provide farmers in developing countries with complementary mitigation strategies to counteract the reduced protection resulted from their partners' RTA formation.

Suggested Citation

  • Xi He, 2022. "Regional Trade Agreements and Excluded Countries," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 428-449, January.
    • Handle: RePEc:wly:ajagec:v:104:y:2022:i:1:p:428-449
    DOI: 10.1111/ajae.12233
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    Cited by:

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    2. Carter, Colin A. & Steinbach, Sandro & Zhuang, Xiting, 2022. "Global Shipping Container Disruptions and U.S. Agricultural Exports," Working Papers 320397, International Agricultural Trade Research Consortium.
    3. Santos, Laura & Ramos Miguel, Rita & do Rosário Pinheiro, Maria & Rijo, Daniel, 2023. "Fostering emotional and mental health in residential youth care facilities: A systematic review of programs targeted to care workers," Children and Youth Services Review, Elsevier, vol. 147(C).
    4. Carter, Colin A. & Steinbach, Sandro & Zhuang, Xiting, 2022. "Global Container Trade Disruptions and U.S. Agricultural Exports," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322364, Agricultural and Applied Economics Association.

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