Trade Liberalization Schedules and Members' Development Characteristics: How are They Connected and Why do They Matter to Trade Agreements?

Abstract

This study examines whether the length of the implementation periods of regional trade agreement (RTA) in relation to trade liberalization schedules and the level of development of member countries affect members' trade. The analysis finds that RTAs formed by partner countries with a similar level of economic development lead to increased trade among members than among North-South RTAs during a shorter transition period of trade and tariff liberalization, regardless of the degree of integration being shallow or deep. The average long-term effects of RTAs formed by developing countries on members' trade diminish 15 years after their implementation. In distinguishing trade direction from developed to developing countries and vice versa, we noted that direction-specific South-North RTAs appear to take less time to see larger increases in Southern exports to the Northern members than direction-specific North-South RTAs do.