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RTAs' Proliferation and Trade‐diversion Effects: Evidence of the ‘Spaghetti Bowl’ Phenomenon
Author(s) -
Sorgho Zakaria
Publication year - 2016
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12295
Subject(s) - trade diversion , economics , value (mathematics) , trade creation , regional trade , international economics , international trade , phenomenon , bilateral trade , gravity model of trade , trade barrier , international free trade agreement , free trade , geography , physics , archaeology , quantum mechanics , machine learning , computer science , china
This paper investigates the trade‐diversion effects of regional trade agreements ( RTA s), so‐called spaghetti bowl phenomenon ( SBP ), in multilateral trade. The SBP is due to the proliferation of RTA s. Thus, I investigate the relationship between the number of RTA s concluded by a country and the additional trade value attributed to a RTA . Using bilateral trade data in a sample of 119 countries, from 1995 to 2012, my main finding reveals a negative trade effect between them, confirming the existence of SBP in multilateral trade. However, results could not conclude the evidence of a negative effect of overlapping RTA s, involving the existence of SBP , within North–North, North–South or South–South trade. But, the additional trade value attributed to a RTA concluded with EU countries or US seems to confirm significantly a trade‐diversion effect because of the number of RTA s signed by these countries.