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Beyond tariff reductions: what extra boost from trade agreement provisions?

Author

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  • Swati Dhingra
  • Rebecca Freeman
  • Eleonora Mavroeidi
Abstract
There is a growing recognition that for developed economies, like the UK, tariff-free market access is just one of a number of measures that ease cross-border trade flows. Modern trade agreements go beyond tariff reductions by setting rules, such as market access and regulation of foreign service providers. We examine the contribution of deep non-tariff provisions on international trade in goods and services. Using a gravity model, we find that provisions related to services, investment, and competition make up half of the overall impact of economic integration agreements on trade flows. These deep provisions have larger effects for trade in services than for trade in goods, and their relative contribution is highest in sectors that facilitate supply chain activity, such as transportation and storage. We apply our sectoral estimates of deep provisions to examine two counterfactuals of the UK signing bilateral deals with the US and with China and India. We find that negotiating services, investment, and competition provisions in these future deals would boost trade relatively more in professional, scientific, and technical activities in the UK.

Suggested Citation

  • Swati Dhingra & Rebecca Freeman & Eleonora Mavroeidi, 2018. "Beyond tariff reductions: what extra boost from trade agreement provisions?," CEP Discussion Papers dp1532, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1532
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    Citations

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    Cited by:

    1. Jacopo Timini & Francesca Viani, 2022. "A highway across the Atlantic? Trade and welfare effects of the EU-Mercosur agreement," International Economics, CEPII research center, issue 169, pages 291-308.
    2. Breinlich, Holger & Corradi, Valentina & Rocha, Nadia & Ruta, Michele & Silva, J.M.C. Santos & Zylkin, Tom, 2021. "Machine learning in international trade research - evaluating the impact of trade agreements," LSE Research Online Documents on Economics 114379, London School of Economics and Political Science, LSE Library.
    3. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02899973, HAL.
    4. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Post-Print halshs-02899973, HAL.
    5. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02548689, HAL.
    6. Bart Los & Marcel P. Timmer, 2020. "Measuring Bilateral Exports of Value Added: A Unified Framework," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 389-421, National Bureau of Economic Research, Inc.
    7. Ana Maria Santacreu, 2021. "Dynamic Gains from Trade Agreements with Intellectual Property Provisions," Working Papers 2021-010, Federal Reserve Bank of St. Louis, revised Nov 2023.
    8. Inmaculada Martínez-Zarzoso & Santiago Chelala, 2021. "Trade agreements and international technology transfer," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(3), pages 631-665, August.
    9. Sébastien Miroudot & Davide Rigo, 2019. "Preferential Trade Agreements and Multinational Production," RSCAS Working Papers 2019/14, European University Institute.
    10. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Working Papers hal-02548689, HAL.
    11. Milena Kern & Jörg Paetzold & Hannes Winner, 2021. "Cutting red tape for trade in services," The World Economy, Wiley Blackwell, vol. 44(10), pages 2858-2886, October.
    12. Rebecca Freeman & Samuel Pienknagura, 2019. "Are all trade agreements equal? The role of distance in shaping the effect of economic integration agreements on trade flows," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(2), pages 257-285, May.
    13. Zijie Pan & Stepan Gordeev & Jiahui Zhao & Ziyi Meng & Caiwen Ding & Sandro Steinbach & Dongjin Song, 2024. "International Trade Flow Prediction with Bilateral Trade Provisions," Papers 2407.13698, arXiv.org.
    14. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Documents de travail du Centre d'Economie de la Sorbonne 20006, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

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    More about this item

    Keywords

    trade agreements; integration agreements; EIAs; trade policy; provisions; non-tariff barriers;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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