z-logo
open-access-imgOpen Access
Have Bilateral Free Trade Agreements (BFTAs) been beneficial? Lessons learned from 11 U.S. BFTAs between 1992 and 2017
Author(s) -
Tareg Ghazi Alghabbabsheh,
Saleh Alsaif,
Md. Saiful Islam,
Tareq Alshammari,
A. M. Mahmoud
Publication year - 2022
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0264730
Subject(s) - gravity model of trade , ordinary least squares , free trade , bilateral trade , international trade , economics , international economics , panel data , trade barrier , econometrics , geography , archaeology , china
This study analyzes aggregate data on trade flows to examine the performance of bilateral free trade agreements (BFTAs) between the United States and 11 BFTA nations in a two-dimensional approach. In line with the literature, this study applies the gravity model and analyzes the effect of the treatment using Poisson pseudo-maximum likelihood (PPML) panel data from 1992 to 2017. We use the PPML as an alternative methodology to an ordinary least squares model, as it can treat zero trade values and lead to unbiased estimates and different consistencies. We consider the trade in goods but excluded services because of the different nature of trade for services. Moreover, this study highlights the quantitative performance of BFTAs without considering the industry level to compare the overall benefits for the trade flows from the U.S. as an exporter to BFTA countries and vice versa. It thus adds to the debate on the effect of FTAs on trade flows and conducts pre-FTA and post-FTA analyses to compare the volumes of exports and imports during both periods. Findings vary according to the direction of trade; notably, some trading partners increased their trading volume to 388%. In sum, this paper provides a collective current state assessment to demonstrate the most plausible reasons for the effects of the 11 BFTAs, in addition to informing policymakers on the lessons learned from each BFTA.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.
Having issues? You can contact us here