Explaining the disappointing trade effects of regional trade agreements
What can explain the small or even negative effects of regional trade agreements on trade? Using trade data between Japan and other 68 countries from 2002 to 2018, this column argues that RTAs reduce fixed costs for foreign direct investment more than exporters. This could have a negative effect on trade. A simulation exercise indicates that introducing RTA between Japan and
Republic Of United States Pacific Partnership Research Institute Of Economy Economic Partnership Panel Data Evidence
Source: voxeu.org