search query: @indexterm TRADE AGREEMENTS / total: 235
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| Author: | Krishna, P. |
| Title: | Are regional trading partners "natural"? |
| Journal: | Journal of Political Economy
2003 : FEB, VOL. 111:1, p. 202-226 |
| Index terms: | International trade Trade agreements Trade policy Economic geography Models USA |
| Language: | eng |
| Abstract: | A central statement of the theory of natural trading partners is that preferential trading with regional trading partners is less likely to be trade diverting and therefore geographically proximate partners are to be considered “natural” partners for preferential arrangements. This paper examines this question empirically. The analytical framework involves a general equilibrium model of preferential trade and an econometric model with tight links to this theory. This framework is used to implement tests of the natural trading partners hypothesis using U.S. trade data for the years 1964-1995. This paper is unable to find any support for the natural trading partners theory in U.S. data. |
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