The effect of regional trade agreements on the global economy and society
Thesis (M.P.P.)--Georgetown University, 2009.; Includes bibliographical references. Since the 1990s, countries have actively begun to make Regional Trade Agreements (RTAs) to build trade relationships without trade barriers such as tariffs and quotas. As a result, the number of concluded RTAs has risen dramatically. However, the actual trade effect of RTAs is still in dispute. In addition, previous research has only focused on several specific RTAs such as NAFTA and EC, and has not covered many other RTAs.; This paper uses the trade and geographic data from several public datasets that cover all RTAs from 1972 to 2000 to examine two research questions; what kinds of factors affect the decision to create RTAs, and does entering an RTA really have a positive effect on the member's trade? In order to isolate the effects of concluding RTAs from other factors, I use multivariate models including the gravity model.; Results from this study indicate that in geographical, economic, and political factors, assurance of political rights most encourages the country to decide to conclude an RTA. Also, rise of GDP per capita and population as well as improvement of political rights has a statistically significant positive effect on the number of concluded an RTA. In addition, the rise of number of RTAs has a statistically significant positive effect on each country's annual average trade amount. Finally, in the gravity model, concluding RTA has a statistically significant positive effect on average amount of bilateral exports.; My findings clearly support the view that concluding RTAs brings positive impacts on a country's economy and that RTAs are a useful building block for the country's future economic progress. At the same time, however, my results suggest the importance of improving the country's political situation since this can facilitate more trade agreements. The government should not ignore such people's voices and must respond them as much as it can. This policy action seems to be off track, but it really leads to future economic development.
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