Environmental Regulation and foreign trade: an analysis for the CAN and MERCOSUR trade blocs in the period 2001-2019

Figures & data

Table 1. Country groups differentiated by origin and Destination.

Origin Countries

Destination Countries

Andean Community (CAN): Bolivia, Colombia, Ecuador, and Peru Southern Common Market (MERCOSUR): Argentina, Brazil, Paraguay, and Uruguay

Argentina, Australia, Austria, Bolivia, Brazil, Canada, Chile, China, Colombia, Costa Rica, Denmark, Dominican Republic, Ecuador, El Salvador, France, Germany, Guatemala, Honduras, Hong Kong (China), India, Indonesia, Israel, Italy, Japan, South Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Panama, Paraguay, Peru, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom, United States of America, Uruguay

Source: TradeMap. Authors’ elaboration.

The Destination Countries box incorporates the economies of the CAN and MERCOSUR members.

Table 2. CAN-European union FTA – Effective date.

FTA with the EU	Effective Date
Colombia	2013
Ecuador	01/01/2017
Peru	03/01/2013

¹¹Source: SICE-OEA .¹¹

¹²See Marques & Spies (2006), Melitz (2005), Subramanian & Wei (2003), and Rose (2002).

¹¹OEA. Trade agreements by country. http://www.sice.oas.org/ctyindex/ARG/ARGagreements_s.asp.

Authors’ elaboration. OEA. Trade agreements by country. http://www.sice.oas.org/ctyindex/ARG/ARGagreements_s.asp.

¹¹OEA. Trade agreements by country. http://www.sice.oas.org/ctyindex/ARG/ARGagreements_s.asp.

Table 3. Sources of variables used in the study.

Endogenous variables		Source
Exports from the country of origin	Expressed in logarithms	Trade Map
Imports from the country of origin	Expressed in logarithms	Trade Map
GDP of the country of origin	Expressed in logarithms	World Bank
GDP of the country of destination	Expressed in logarithms	World Bank
Population of the country of origin	Expressed in logarithms	World Bank
Population of the country of destination	Expressed in logarithms	World Bank
Bilateral distance	Coordinates of longitude and latitude	CEPII
Similarity (GDP similarity index)	Expressed in logarithms	CEPII
Factor (Absolute difference in factor endowments between countries)	Expressed in logarithms	World Bank
Dummy variables for bilateral characteristics	Vector of variables including common language (dummy), shared borders (dummy), and the land area of the exporter and importer.	CEPII
Kyoto	1: The countries have signed the Kyoto Agreement. 0: The countries have not signed the Kyoto Agreement.	Climate Policy Database
Paris	1: The countries have signed the Paris Agreement. 0: The countries have not signed the Paris Agreement.	Climate Policy Database
Nagoya	1: The countries have signed the Nagoya Agreement. 0: The countries have not signed the Nagoya Agreement.	Climate Policy Database
Free Trade Agreements with the European Union (UE)	1: The countries have an FTA with the EU. 0: The countries do not have an FTA with the EU.	Organization of American States (OAS)

Source: Authors’ elaboration.

Table 4. Descriptive statistics.

Variable	N	Mean	Std.Dev.	Min	Max
	(1)	(2)	(3)	(4)	(5)
Ln(Exports)	6,536	12.25	2.48	1.1	18.0
Ln(Imports)	6,536	16.73	1.21	14.3	19.3
Ln(Mass)	6,536	51.90	2.39	45.4	59.0
Bilateral distance	6,536	8.93	0.83	5.4	9.9
Similarity	6,536	−1.81	1.13	−6.6	−0.7
Factor	6,536	1.39	0.92	0.0	4.2
Contiguity	6,536	0.09	0.29	0	1
Common language	6,536	0.31	0.46	0	1
Ln(Area)	6,536	13.89	1.23	12.1	16.0
Ln(Area Partner)	6,536	12.50	2.26	6.5	16.7
Paris Agreement	6,536	0.18	0.38	0	1
Kyoto Agreement	6,536	0.02	0.15	0	1
Nagoya Agreement	6,536	0.09	0.29	0	1
Union European Agreement	6,536	0.03	0.17	0	1

Source: Authors’ elaboration. The descriptive statistics presented in the table reflect the overall data.

Table 5. Export analysis estimation.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
	Total			CAN			MERCOSUR
Variables	GLS	Within	HT	GLS	Within	HT	GLS	Within	HT
Ln(Mass)	0.202	0.232*	0.357***	0.162	0.188	0.407***	0.185	0.211	0.286***
	(0.145)	(0.136)	(0.0366)	(0.260)	(0.247)	(0.0505)	(0.186)	(0.176)	(0.0347)
Ln(Distance)	−2.526		−0.560***	−2.678		−0.722***	0.601		−0.374***
	(1.759)		(0.143)	(1.688)		(0.270)	(0.684)		(0.110)
Similarity	0.521***	0.517***	0.426***	0.189	0.198	0.161	0.648***	0.635***	0.161**
	(0.187)	(0.180)	(0.143)	(0.366)	(0.359)	(0.197)	(0.219)	(0.211)	(0.0714)
Factors	0.296*	0.291*	0.170	0.205	0.211	−0.00543	0.292	0.279	−0.162
	(0.156)	(0.150)	(0.125)	(0.275)	(0.274)	(0.175)	(0.189)	(0.181)	(0.103)
Paris (=1)	0.288*	0.303*	−0.0105	0.128	0.145	−0.143	0.475*	0.483*	0.118
	(0.162)	(0.155)	(0.0885)	(0.225)	(0.215)	(0.118)	(0.272)	(0.263)	(0.124)
Kyoto (=1)	0.532*	0.527*	0.540*	0.474	0.467	0.500*
	(0.297)	(0.290)	(0.291)	(0.299)	(0.292)	(0.295)
Nagoya (=1)	−0.291**	−0.280**	−0.300**	−0.0708	−0.0441	−0.123	−0.483***	−0.486***	−0.457***
	(0.140)	(0.131)	(0.133)	(0.215)	(0.199)	(0.207)	(0.171)	(0.160)	(0.159)
European Union (EU) (=1)	−0.558**	−0.568**	−0.573**	−0.513**	−0.539**	−0.554**
	(0.242)	(0.236)	(0.239)	(0.248)	(0.241)	(0.249)
Country Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	6,536	6,536	6,536	3,268	3,268	3,268	3,268	3,268	3,268
R-2		0.033			0.039			0.035
Number of groups	344	344	344	172	172	172	172	172	172

The column (1), (4) and (7) corresponds to the estimation of a panel with random effects. The column (2), (5) and (8) corresponds to the estimation of a panel with fixed effects (within groups). Finally, the column (3), (6) and (6) corresponds to the estimation of a panel with the Hausman-Taylor method. The estimation methodology was conducted using panel data and includes control variables such as a common language, contiguity between countries, country size, and partner country size (both expressed in logarithms). Additionally, the estimation includes categorical variables such as country fixed effects and year fixed effects. The standard errors in parentheses are robust, and the significance level corresponds to the following classification: * p<0.1, ** p<0.5, *** p<0.01.

Table 6. Import analysis estimations.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
	Total			CAN			MERCOSUR
Variables	GLS	Within	HT	GLS	Within	HT	GLS	Within	HT
Ln(Mass)	0.272***	0.271***	0.609***	0.246***	0.248***	0.615***	0.192***	0.190***	0.604***
	(0.0170)	(0.0162)	(0.00591)	(0.0302)	(0.0287)	(0.00800)	(0.0185)	(0.0175)	(0.00834)
Ln(distance)	−0.00934		−0.353***	−0.0303		−0.408***	−0.283***		−0.204
	(0.0409)		(0.112)	(0.0199)		(0.110)	(0.0666)		(0.170)
Similarity	0.196***	0.199***	0.258***	0.210***	0.215***	0.346***	0.149***	0.150***	0.188***
	(0.0237)	(0.0230)	(0.0347)	(0.0413)	(0.0398)	(0.0609)	(0.0216)	(0.0208)	(0.0427)
Factor	−0.0831***	−0.0803***	−0.178***	−0.101***	−0.0990***	−0.213***	−0.0328*	−0.0299*	−0.156***
	(0.0200)	(0.0192)	(0.0273)	(0.0369)	(0.0357)	(0.0556)	(0.0174)	(0.0166)	(0.0303)
Paris (=1)	0.0453***	0.0465***	−0.203***	0.138***	0.139***	−0.169***	0.00637	0.00665	−0.224***
	(0.0158)	(0.0151)	(0.00861)	(0.0165)	(0.0158)	(0.00903)	(0.0311)	(0.0301)	(0.0132)
Kyoto (=1)	0.0575*	0.0578**	0.0721*	0.0714**	0.0714**	0.0832*
	(0.0295)	(0.0286)	(0.0416)	(0.0287)	(0.0279)	(0.0431)
Nagoya (=1)	−0.0367**	−0.0390**	−0.0912***	0.00758	0.00606	−0.0667***	−0.0971***	−0.1000***	−0.129***
	(0.0180)	(0.0171)	(0.0193)	(0.0232)	(0.0218)	(0.0235)	(0.0156)	(0.0149)	(0.0263)
European Union (EU) (=1)	0.00741	0.00732	0.00452	−0.0802**	−0.0800**	−0.0641
	(0.0345)	(0.0335)	(0.0457)	(0.0318)	(0.0308)	(0.0448)
Country Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	6,536	6,536	6,536	3,268	3,268	3,268	3,268	3,268	3,268
R-2		0.968			0.981			0.973
Number of groups	344	344	344	172	172	172	172	172	172

The column (1), (4) and (7) corresponds to the estimation of a panel with random effects. The column (2), (5) and (8) corresponds to the estimation of a panel with fixed effects (within groups). Finally, the column (3), (6) and (6) corresponds to the estimation of a panel with the Hausman-Taylor method. The estimation methodology was conducted using panel data and includes control variables such as a common language, contiguity between countries, country size, and partner country size (both expressed in logarithms). Additionally, the estimation includes categorical variables such as country fixed effects and year fixed effects. The standard errors in parentheses are robust, and the significance level corresponds to the following classification: * p<0.1, ** p<0.5, *** p<0.01.

Table

Country	FTA	Entry into force
Argentina	Chile	11/02/17
	MERCOSUR -Colombia AAP.CE Nº 72	07/21/17
	MERCOSUR – Egypt	08/02/10
	MERCOSUR – Israel	12/18/07
	MERCOSUR – Peru (ACE 58)	11/30/05
Bolivia	Mexico	05/17/2010
Brazil	Chile	11/21/18
	MERCOSUR -Colombia AAP.CE Nº 72	07/21/17
	MERCOSUR – Egypt	08/02/10
	MERCOSUR – Israel	12/18/07
	MERCOSUR – Perú (ACE 58)	11/30/05
	MERCOSUR	2005
	North Triangule (El Salvador, Guatemala, Honduras)	2009
	EFTA	2011
	Canada	2011
	United States of America	2012
	European Union	2013
	South Korea	2016
	Costa Rica	2016
	Pacific Alliance	2016
Ecuador	European Union	1/01/2017
Paraguay	MERCOSUR -Colombia AAP.CE Nº 72	07/21/17
	MERCOSUR – Egypt	08/02/10
	MERCOSUR – Israel	12/18/07
	MERCOSUR – Peru (ACE 58)	11/30/05
Peru	United States of America	1/02/2009
	Cuba	9/03/2001
	MERCOSUR	2/01/2016
	Pacific Alliance	Jun-17
	Chile	22/08/2006
	Canada	1/08/2009
	Singapore	1/08/2009
	China	1/03/2010
	Thailand	31/12/2011
	Mexico	1/02/2012
	Japan	1/05/2012
	EFTA	2010–2011
	South Korea	1/08/2011
	European Union	1/03/2013
	Panama	1/05/2012
	Costa Rica	1/06/2013
	Venezuela	7/01/2012
	Honduras	1/01/2017
Uruguay	Mexico (ACE 60)	11/15/03
	Chile	10/04/16
	MERCOSUR -Colombia AAP.CE Nº 72	07/21/17
	MERCOSUR – Egypt	08/02/10
	MERCOSUR – Israel	12/18/07
	MERCOSUR – Perú (ACE 58)	11/30/05

Source: Organization of American States (OAS). Authors’ elaboration.

Table

Countries and Entry into Force
	8. b Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity	KYOTO PROTOCOL – Status of ratification		7.d Paris Agreement
Countries of origin	Ratification/Accession Approval (AA), Acceptance(A), Accession(a), Ratification	RATIFICATION, ACCEPTANCE, ACCESSION, APPROVAL	ENTRY INTO FORCE	Ratification, Acceptance(A), Approval (AA), Accession(a)
Argentina	12/9/2016	09/28/2001 (R)	02/16/2005	09/21/2016
Bolivia	6/10/2016 a	11/30/1999 (R)	02/16/2005	10/05/2016
Brazil	9/3/2021	08/23/2002 (R)	02/16/2005	09/21/2016
Colombia		11/30/2001 (Ac)	02/16/2005	07/12/2018
Ecuador	09/20/2017	01/13/2000 (R)	02/16/2005	09/20/2017
Paraguay		08/27/1999 (R)	02/16/2005	10/14/2016
Peru	07/08/2014	09/12/2002 (R)	02/16/2005	07/25/2016
Uruguay	07/14/2014	02/05/2001 (R)	02/16/2005	10/19/2016
Destination Countries
Argentina	12/9/2016	09/28/01 (R)	02/16/2005	09/21/2016
Australia		12/12/07 (R)	03/11/2008	09/11/2016
Austria	07/20/2018	05/31/02 (R)	02/16/2005	10/05/2016
Bolivia	10/06/2016 a	11/30/99 (R)	02/16/2005	10/05/2016
Brazil	03/09/2021	08/23/02 (R)	02/16/2005	09/21/2016
Canada		12/17/02 (R)	02/16/2005	10/05/2016
Chile		08/26/02 (R)	02/16/2005	02/10/2017
China	06/08/2016 a	08/30/02 (Ap)	02/16/2005	09/03/2016
Colombia		11/30/01 (Ac)	02/16/2005	07/12/2018
Costa Rica		09/08/02 (R)	02/16/2005	10/13/2016
Denmark	05/01/2014 AA	05/31/02 (R)	02/16/2005	11/01/2016 AA
Dominican Republic	11/13/2014	02/12/02 (Ac)	02/16/2005	09/21/2017
Ecuador	09/20/2017	01/13/00 (R)	02/16/2005	09/20/2017
El Salvador		11/30/98 (R)	02/16/2005	03/27/2017
France	08/31/2016	05/31/02 (Ap)	02/16/2005	10/05/2016
Germany	04/21/2016	05/31/02 (R)	02/16/2005	10/05/2016
Guatemala	06/18/2014	10/05/99 (R)	02/16/2005	01/25/2017
Honduras	08/12/2013	07/19/00 (R)	02/16/2005	09/21/2016
Hong Kong, China
India	10/09/2012	08/26/02 (Ac)	02/16/2005	02/10/2016
Indonesia	09/24/2013	12/03/04 (R)	03/03/2005	31/10/2016
Israel		03/15/04 (R)	02/16/2005	22/11/2016
Italy		05/31/02 (R)	02/16/2005	11/11/2016
Japan	05/22/2017 A	06/04/02 (At)	02/16/2005	11/08/2016 A
South Korea	05/19/2017	11/08/02 (R)	02/16/2005	11/03/2016
Malaysia	11/05/2018 a	09/04/02 (R)	02/16/2005	16/11/2016
Mexico	05/16/2012	09/07/00 (R)	02/16/2005	09/21/2016
Netherlands	08/19/2016 A	05/31/02 (At)	02/16/2005	07/28/2017 A
New Zealand		12/19/02 (R)	02/16/2005	10/04/2016
Norway	10/01/2013	05/30/02 (R)	02/16/2005	06/20/2016
Panama	12/12/2012	03/05/99 (R)	02/16/2005	09/21/2016
Paraguay		08/27/99 (R)	02/16/2005	10/14/2016
Peru	07/08/2014	09/12/02 (R)	02/16/2005	07/25/2016
Poland		12/13/02 (R)	02/16/2005	10/07/2016
Portugal	04/11/2017 AA	05/31/02 (Ap)	02/16/2005	10/05/2016
Russian Federation		18/11/04 (R)	11/18/04 (R)	11/18/2004 (R)
Singapore		04/12/06 (Ac)	11/07/2006	09/21/2016
Spain	06/03/2014	05/31/02 (R)	02/16/2005	01/12/2017
Sweden	09/08/2016	05/31/02 (R)	02/16/2005	10/13/2016
Switzerland	08/11/2014	07/09/03 (R)	02/16/2005	06/10/2017
United Arab Emirates	09/12/2014 a	01/26/05 (Ac)	04/26/2005	09/21/2016 A
United Kingdom	02/22/2016	05/31/02 (R)	02/16/2005	11/18/2016
United States of America				20/01/2021 A
Uruguay	07/14/2014	02/05/01 (R)	02/16/2005	10/19/2016

Source: Climate Policy Database. Authors’ elaboration.

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