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52
on the politically hypersensitive sector of agriculture. They find that preferential
trade agreements contribute positively to agricultural trade creation with no adverse
impact on non-members.
Scott L. Baier, Jeffrey H. Bergstrand, and Erika Vidal (2007) conclude that
increase in trade activity is greater than studies find due to a downward endogeniety
bias unaccounted for by gravity models. The bias results from self-selection of states
in RTAs motivated by competition to liberalize. Scott L. Baier and Jeffrey H.
Bergstrand (2007) find that gravity models employing cross-sectional data and
treating the RTA choice as exogenous understate the impact on trade by as much as
85%.
Consistent with this static welfare tradition, Chang and Winters (2002)
examine how change in terms of trade affects welfare. Relying on product level
import data, these authors discover that competitive pressure stimulates nonmember
countries to reduce export prices thereby resulting in welfare gains accruing to RTA
members.
In summary, the empirical examination of the effects of RTAs finds that trade
creation exceeds trade diversion, which implies greater efficiency and an increase in
welfare. Analysts seek to explain the existence of RTAs given that an economic
welfare analysis clearly results in a recommendation of free trade. Harry Johnson
(1965b) presents an economic model that accommodates the inclusion of non-economic
factors to produce a suboptimal economic outcome preferred by
governments. Johnson asserts that the GATT will be unattractive to developing
Object Description
| Title | Riding the wave: an interdisciplinary approach to understanding the popularity of RTA notifications to the GATT/WTO |
| Author | McClough, David Andrew |
| Author email | mcclough@usc.edu; dmcclou@bgsu.edu |
| Degree | Doctor of Philosophy |
| Document type | Dissertation |
| Degree program | Political Economy & Public Policy |
| School | College of Letters, Arts and Sciences |
| Date defended/completed | 2008-08-07 |
| Date submitted | 2008 |
| Restricted until | Unrestricted |
| Date published | 2008-10-18 |
| Advisor (committee chair) | Katada, Saori N. |
| Advisor (committee member) |
Nugent, Jeffrey B. Cartier, Carolyn |
| Abstract | The proliferation of Regional Trade Agreements (RTAs) notified to the GATT/WTO since the early 1980s deviates from the long-term trend and reflects participation of nearly every member of the United Nations. This dissertation seeks to explain the current wave of RTA notifications by supplementing the economic model of supply and demand with diffusion theory. Application of the supply and demand model is useful in distinguishing between changes in demand and changes insupply of RTAs. This distinction is seldom emphasized in the current literature examining RTAs. Recent applications of diffusion theory in the discipline of international relations offer a unique opportunity to include a dynamic force in the static analysis of the supply and demand model. Empirical analysis assesses the fit of the RTA diffusion pattern by comparing the RTA diffusion pattern to a cumulative standard normal distribution. The analysis indicates that the diffusion pattern of RTAs resembles the diffusion of an innovation through a social system.; The implication of this finding is that the adoption of an RTA as trade policy is not made independently of the decision by other states. Indeed, the analysis suggests interdependency between states. Further empirical analysis explores economic and political variables that may explain the decision to adopt the RTA as trade policy. The empirical analysis is unique in that survival analysis is utilized to assess the variation in duration to adopt an initial RTA since the early 1980s. A central discovery is that regional designation explains the variation in duration to adopt an initial RTA. Multiple regression analysis confirms the results generated using survival analysis and support the assertion that the proliferation of RTAs likely reflects changes in both the demand for RTAs and the supply of RTAs. This dissertation concludes by considering implications for the WTO resulting from the increase in RTA notifications. |
| Keyword | trade agreements |
| Coverage date | after 1980 |
| Language | English |
| Part of collection | University of Southern California dissertations and theses |
| Publisher (of the original version) | University of Southern California |
| Place of publication (of the original version) | Los Angeles, California |
| Publisher (of the digital version) | University of Southern California. Libraries |
| Provenance | Electronically uploaded by the author |
| Type | texts |
| Legacy record ID | usctheses-m1675 |
| Contributing entity | University of Southern California |
| Rights | McClough, David Andrew |
| Repository name | Libraries, University of Southern California |
| Repository address | Los Angeles, California |
| Repository email | cisadmin@lib.usc.edu |
| Filename | etd-McClough-2338 |
| Archival file | uscthesesreloadpub_Volume32/etd-McClough-2338.pdf |
Description
| Title | Page 61 |
| Contributing entity | University of Southern California |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 52 on the politically hypersensitive sector of agriculture. They find that preferential trade agreements contribute positively to agricultural trade creation with no adverse impact on non-members. Scott L. Baier, Jeffrey H. Bergstrand, and Erika Vidal (2007) conclude that increase in trade activity is greater than studies find due to a downward endogeniety bias unaccounted for by gravity models. The bias results from self-selection of states in RTAs motivated by competition to liberalize. Scott L. Baier and Jeffrey H. Bergstrand (2007) find that gravity models employing cross-sectional data and treating the RTA choice as exogenous understate the impact on trade by as much as 85%. Consistent with this static welfare tradition, Chang and Winters (2002) examine how change in terms of trade affects welfare. Relying on product level import data, these authors discover that competitive pressure stimulates nonmember countries to reduce export prices thereby resulting in welfare gains accruing to RTA members. In summary, the empirical examination of the effects of RTAs finds that trade creation exceeds trade diversion, which implies greater efficiency and an increase in welfare. Analysts seek to explain the existence of RTAs given that an economic welfare analysis clearly results in a recommendation of free trade. Harry Johnson (1965b) presents an economic model that accommodates the inclusion of non-economic factors to produce a suboptimal economic outcome preferred by governments. Johnson asserts that the GATT will be unattractive to developing |
