Here a numerical simulation model, implemented in Excel, that can be used to expand student understanding of the theory of customs unions is presented. The model allows examination of core customs union issues including trade creation, trade diversion, and the Kemp–Wan theorem. By responding to an experimental assignment that guides them through the simulation, students are able to learn the th...

Article history: Received 8 February 2013 Received in revised form 1 April 2014 Accepted 5 April 2014 Available online 13 April 2014 This study uses a theoretically justified gravity model of trade to examine the impact of the ASEAN–China Free Trade Agreement (ACFTA) on exports, focusing on trade creation and diversion effects. The model is tested on a sample of 31 countries over the period dat...

This paper examines the effect of the U.S.-Mexico trade agreement under the North American Free Trade Agreement (NAFTA). The results suggest that U.S. agricultural imports from Mexico have been responsive to tariff rate reductions applied to Mexican products. A one percentage point decrease in tariff rates is associated with an increase in U.S. agricultural imports from Mexico by 5.31% in the f...

China has developed many strategies to promote sustainable trade, including accelerating the signing of free-trade agreements (FTAs). However, there is a lack studies examining impact FTAs on growth foreign trade from holistic perspective. This paper applies an augmented gravity model verify creation and diversion effects China’s that are currently in effect. A panel data analysis over period 1...

This paper uses a gravity model to assess ex-post regional trade agreements. The model includes 130 countries and is estimated with panel data over the period 1962–1996. The introduction of the correct number of dummy variables allows for identification of Vinerian trade creation and trade diversion effects, while the estimation method takes into account the unobservable characteristics of each...

This paper investigates whether the India-Sri Lanka Free Trade Agreement (ISLFTA) has had trade creation or trade diversion effects on the rest of the World. The method used resembles the one used by Romalis (2005) to study NAFTA. In order to use the variations in tariff at the product level, we use six digit HS classification of products. We construct seven panel data sets for the period 1996 ...

a r t i c l e i n f o The ASEAN–China free trade agreement went into effect January 1, 2010 and became the world's third largest FTA by trade volume after the European Economic Area and the North American Free Trade Agreement. This paper focuses on highlighting the impacts of the reduction of barriers to trade on investment in a dynamic general computable equilibrium framework. We present and c...