RTAs’ Proliferation and Trade-diversion effects: Evidence of the “Spaghetti Bowl” Phenomenon

Sorgho, Zakaria (2014): RTAs’ Proliferation and Trade-diversion effects: Evidence of the “Spaghetti Bowl” Phenomenon.

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, we investigate the relationship between the number of RTAs concluded by a country and the additional trade value attributed to an RTA. The 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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Regional Trade Agreements; Spaghetti Bowl Phenomenon; Gravity equation; Trade diversion
• Subjects: F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade; F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; F - International Economics > F1 - Trade > F15 - Economic Integration

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