Regional Trade Agreements and Export Trade Flows: Developing Economies and the Global Financial Crisis of 2007 to 2009

ABSTRACT

We explore the impact of the global financial crisis on export trade flows among member countries of MERCOSUR, NAFTA, ASEAN, Maghreb, and SACU. The analysis also focuses on the role of political rights, exchange rate, and export diversification as control mechanisms during the economic crisis. The results show differentiated patterns of trade creation across regions. We found an annual reduction (increment) in the gains of MERCOSUR and ASEAN (NAFTA, Maghreb, and SACU) members during the years after the global financial crisis. We also found that export concentration was the sole robust mechanism enhancing the volume of exports.

KEYWORDS:

• Regional trade agreement
• trade flows
• economic crisis
• trade mechanisms
• developing countries

Disclosure statement

The author declares that he has no competing interests.

Supplemental material

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Notes

¹ The appendix can be found online at www.tandfonline.com/uitj.

² Agricultural products (food; and raw materials), and mining products (ores and other minerals; fuels; and non-ferrous metals).

³ We decided to extend the crisis period until 2010 because for some countries, the trade collapse happened in late 2009, and then trade recovered very quickly. For robustness checks, we also perform the analysis by considering the crisis (post-crisis) period as 2007 to 2009 (2010 to 2014).

⁴ For practical purposes, we listed Venezuela as a full MERCOSUR member to derive the econometric estimates.

Additional information

Funding

The author received no financial support for the research.