On the effects of regional trade agreements on de facto trade integration

Abstract

This paper employs a set of indicators in order to assess how trade integration has evolved for the period 1985-2007 and how far the world is from reaching its full potential for international trade integration. In today’s highly globalized world in which we can contemplate the increasingly arising of regional trade agreements (RTAs), the question of how trade blocs affect trade integration is more relevant than ever. Therefore, the core of this article is to determine whether globalization has mostly been intensified or prevented by RTAs from all over the world. Results show that we are still far from achieving the full potential of trade integration and that some RTAs has been statistically significant on trade integration over the time. Indeed, ASEAN is the trade agreement most influent on integration, followed by the EU.