Regional Trade Agreements Boost Member Trade, Hurt Non-Members
In studying trade agreements among 130 countries from 1962 to 1996, it was found that these regional deals increased trade between member countries significantly, taking business away from others worldwide. By analyzing how certain economic "dummy variables" influence trade relationships, the researchers identified both positive and negative impacts of these agreements, showing that countries involved benefited more within their group, sometimes to the detriment of global trade.