Advantages Of Reciprocal Trade Agreement
What could be the consequences of mutual trade policy in practice? The simplest result would be for the United States to increase its tariffs to comply with those of other nations. The Mercatus Center estimates that this policy would increase the total number of products facing U.S. tariffs by 10, from about 3,000 to nearly 30,000. A more worrying possibility is that the United States is increasing tariffs to an even higher level than its partners in order to measure the impact of non-tariff barriers on U.S. exports. Since it is very difficult to quantify this last point, the next analysis aims to answer this question only by examining the rates of entitled. Three agreements mainly concerned industrialized countries. Between 1975 and 2005, the EU recorded a 95% growth in trade in raw materials in the EU and a 93% increase in manufactured goods, compared to an agreement which forecasts an annual growth rate of 3%. The three NAFTA countries, the United States, Canada and Mexico, recorded an 8% annual increase in food trade between 1989 and 2005 and an annual growth of 3% for raw materials. At the same time, Australia and New Zealand recorded an annual increase of 6% in trade in industrial products and 3% in raw materials as part of the Agreement on Closer Economic Relations. In addition, in agreement with other recent work, we go further than  because we also take into account heteroscid residues and zero trading flows, estimating the gravitational equation in layers and not in protocols with the Fish Pseudo-Maxi Likelihood (PPML) estimate. This estimate has been made popular by  to deal with a potential heteroskedasticity distortion resulting from the linearization of gravitational equations, but it is also useful in its ability to process zeroes in bilateral trade flows. After , a large number of recent studies address the two econometric problems of PPML (see z.B, , , , , , ).
However, the large data sets used in most of these studies or the difficulties encountered in achieving convergence have excluded estimating Fish`s gravity equations, including the three types of high-dimensional solid effects that must take into account both unsuserated bilateral heterogeneity and notions of multilateral resistance (country-fixing effects, fixed export and import time effects). Fortunately,  have recently implemented an iterative estimate of PPML that allows researchers to manage both problems simultaneously for both problems in a large data set, as used in this paper. Taking advantage of this technical evolution, we appreciate the following gravitational equation with the PPML estimate: (2) Data on the dependent variable (bilateral export flow) come from the Direction of Trade (IMF) dataset. The sample includes 182 countries and territories over a 15-year period over a four-year period between 1960 and 2016. The money union data comes from the CIA`s World Factbook. Indicators of preferential trade agreements and GATT/WTO were developed on the basis of World Trade Organization data. In this study, we use the term “preferential trade agreements” to refer to other higher economic integration agreements. Indeed, most of the economic integration agreements considered in the sample are free trade agreements. Data on unilateral trade preferences come from a variety of sources. Data on the African Growth and Opportunity Act and the Everything but Arms initiative come from the corresponding websites.