NONCONVENTIONAL PROVISIONS IN REGIONAL TRADE AGREEMENTS: DO THEY ENHANCE INTERNATIONAL TRADE?

The scope of recent regional trade agreements (RTAs) has become much broader than before by the inclusion of nonconventional provisions such as those on competition policy and intellectual property rights protection. This paper empirically examines the extent to which those nonconventional provisions in RTAs enhance international trade between RTA member countries by estimating a gravity equation with detailed information on the contents of RTAs. We find that the provision for competition policy has the largest effect on international trade, followed by the government procurement provision. These two provisions have significant and positive impacts on intensive margin intensive margin (trade values per variety) and extensive margin (number of varieties traded)