Accessible Version
Regional Trade Agreements with Global Value Chains Accessible Data
Description Figure 1:
This figure presents the result of our empirical analysis regarding the effect of RTAs on three different types of trade flows: trade flows between members of the agreement (left bar), trade flows from the rest of the world to the agreement zone (middle bar) and trade flows from the agreement zone to the rest of the world (right bar). Results are based on a regression that includes country-pair and country-time fixed effects as well as dummies for each of the three type of trade flows. For each column, we decompose the effect into three parts. The red part shows the value of the “stand alone” coefficient for the relevant RTA dummy. The green part is the additional RTA effect due to regional interaction and is computed using the point estimate of the interaction between our “regional integration” variable and relevant RTA dummy, which is then multiplied by the average value of the “regional integration” variable for the relevant type of trade flow. Finally, the blue part is the additional RTA effect due to “bilateral integration”, computed in a similar way.
All data is presented in the table below:
| Effect of an RTA without GVC | Additional impact due to "Bilateral" GVC integration | Additional impact due to "Regional" GVC integration | |
|---|---|---|---|
| Trade flows between members | 0.22 | 0.03 | -0.01 |
| Trade flows "going in" the agreement zone | -0.33 | 0.04 | -0.03 |
| Trade flows "going out" the agreement zone | -0.1 | -0.29 | 0.78 |
Note: This figure presents the result of our empirical analysis regarding the effect of RTAs on three different types of trade flows: trade flows between members of the agreement (left bar), trade flows from the rest of the world to the agreement zone (middle bar) and trade flows from the agreement zone to the rest of the world (right bar). Results are based on a regression that includes country-pair and country-time fixed effects as well as dummies for each of the three type of trade flows. For each column, we decompose the effect into three parts. The red part shows the value of the “stand alone” coefficient for the relevant RTA dummy. The green part is the additional RTA effect due to regional interaction and is computed using the point estimate of the interaction between our “regional integration” variable and relevant RTA dummy, which is then multiplied by the average value of the “regional integration” variable for the relevant type of trade flow. Finally, the blue part is the additional RTA effect due to “bilateral integration”, computed in a similar way.
Source: de Soyres et al. (2020).
Description Figure 2:
This figure provides an overview of the incentives to change import tariffs following a RTA. In the left part of the figure we focus on a framework without GVC, while the right part shows the results in a model with GVC. Comparing the left and right parts enables to understand how the presence of GVC change the consequence of RTAs for incentives to change import tariffs.
In blue, we show the direction of change in the “Best Response” function for each country. A “+” sign (resp “-“ sign) means that, after signature of the RTA, the country mentioned in the column head chooses a higher (resp. a lower) import tariff in response to any tariff chosen by other countries. A “=” sign means that the function is not materially changed.
In red, we present the Nash Equilibrium which is the intersection of Best Responses. The “+” and “-“ show the direction of the change when comparing the equilibrium after and before the signature of the RTA. A double sign (either “++” or “- -“) should be interpreted as a larger change than a simple sign.
Note: This figure provides an overview of the incentives to change import tariffs following a RTA. In the left part of the figure we focus on a framework without GVC, while the right part shows the results in a model with GVC. Comparing the left and right parts enables to understand how the presence of GVC change the consequence of RTAs for incentives to change import tariffs.
In blue, we show the direction of change in the “Best Response” function for each country. A “+/-” sign means that, after signature of the RTA, the country mentioned in the column head chooses a higher/lower import tariff in response to any tariff chosen by other countries. A “=” sign means that the function is not materially changed.
In red, we present the Nash Equilibrium which is the intersection of Best Responses. The “+” and “-“ show the direction of the change when comparing the equilibrium after and before the signature of the RTA. A double sign (either “++” or “- -“) should be interpreted as a larger change than a simple sign.
Source: based on de Soyres et al. (2020).