RTAs' Proliferation and Trade-Diversion Effects: Evidence of the 'Spaghetti Bowl' Phenomenon

CREATE Working Paper 2015-2

24 Pages Posted: 9 Jun 2015

See all articles by Zakaria Sorgho

Zakaria Sorgho

Centre for Research on the Economics of the Environment, Agri-food, Transport and Energy (CREATE)

Date Written: June 8, 2015

Abstract

This paper investigates the trade-diversion effects of regional trade agreements (RTAs), so-called “Spaghetti bowl” Phenomenon (SBP), in multilateral trade. The SBP is due to the proliferation of RTAs. Thus, I investigate the relationship between the number of RTAs concluded by a country and the additional trade value attributed to an RTA. Using bilateral trade data in a sample of 119 countries, from 1995 to 2012, my main finding reveals a negative trade-effect between them, confirming the existence of SBP multilateral trade. However, results could not conclude evidence of a negative effect of overlapping RTAs, involving the existence of SBP, within North-North, North-South or South-South trade. But, the additional trade value attributed to an RTA concluded with EU countries or US seems to confirm significantly a trade-diversion effect because of the number of RTAs signed by these countries.

Keywords: Regional Trade Agreements, Spaghetti Bowl Phenomenon, Gravity equation, Trade diversion

JEL Classification: F11, F12, F15

Suggested Citation

Sorgho, Zakaria, RTAs' Proliferation and Trade-Diversion Effects: Evidence of the 'Spaghetti Bowl' Phenomenon (June 8, 2015). CREATE Working Paper 2015-2, Available at SSRN: https://ssrn.com/abstract=2616015 or http://dx.doi.org/10.2139/ssrn.2616015

Zakaria Sorgho (Contact Author)

Centre for Research on the Economics of the Environment, Agri-food, Transport and Energy (CREATE) ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
53
Abstract Views
448
Rank
679,087
PlumX Metrics