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Do Trade Agreements Increase Food Trade?
Author(s) -
Mujahid Irfan,
Kalkuhl Matthias
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.12324
Subject(s) - gravity model of trade , endogeneity , economics , international economics , international trade , trade barrier , panel data , regional trade , developing country , world trade , bilateral trade , free trade , geography , economic growth , econometrics , archaeology , china
In addition to multilateral trade agreements under the W orld T rade O rganization ( WTO ), the world has seen a remarkable proliferation of regional trade agreements ( RTA s) in the last two decades. This study investigates whether these multilateral and regional trade institutions increase food trade and bring the world into a freer flow of food. The gravity model of international trade is used for the empirical analysis. The model is developed in a large panel data setting and attempted to address some potential problems in the estimations including multilateral trade resistances, zero trade values and endogeneity. The results suggest that both the WTO and RTA s have delivered significant positive effects on trade among the participant countries, but not food. Only RTA s are found to have increased food trade among the participant countries. However, although on average the WTO is found to have negative implications on food trade, it facilitates the developing countries more than the developed countries.