The influence of the China FTA in Peruvian trade flows
Authors
-
Alan Fairlie Reinoso
Profesor principal del Departamento de Economía de la Pontificia Universidad Católica del Perú (PUCP). Parlamentario Andino por la representación de Perú para el periodo 2016-2021. Magíster en Comercio Internacional y Desarrollo en el Instituto Torcuato Di Tella.
http://orcid.org/0000-0001-7584-2374
Abstract
Peru has signed trade agreements with its most important partners in the last decade, including the FTA with China, which is currently its main trading partner. This research seeks to estimate, through a model of increased severity, the effect of this FTA on trade flows, both at an aggregated and disaggregated level. The results show that the FTA with China has had a positive impact on both exports and imports from Peru, and that the impact on exports has been over twice than on imports. In turn, in the disaggregation by type of goods, commodities have benefited the most. These findings show that the export basket with our main trading partner has not diversified overtime, but rather our primary exports have deepened.Keywords:
China, Free trade agreement, Peru, Gravity model, trade flowsReferences
Alleyne, A. & Lorde, T. (2014). A gravity model approach to analyzing the trade performance of Caricom members states. Applied Econometrics and International Development, 14 (2), 145-160.
Anderson, J. (1979). A Theoretical Foundation for the Gravity Equation. The American Economic Review, 69 (1), 106 – 116.
Anderson, J. & Van Wincoop, E. (2003). Gravity with Gravitas: A Solution to the Border Puzzle. The American Economic Review, 93 (1), 170 – 192.
Bacaria, J., Osorio, M. & Artal, A. (2013). Evaluación del Acuerdo de Libre Comercio México-Unión Europea mediante un modelo gravitacional. Economía Mexicana, Nueva Época, 1 (1), 143-163.
BCRP. (2019). Guía Metodológica de la Nota Semanal. Lima: Departamento de Publicaciones Económicas.
Carrere, C. (2006). Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model. European Economic Review, 50 (2), 223-247.
Gauto, V. (2012). An Econometric Analysis of trade creation and trade diversion in Mercosur: the Case of Paraguay. International Association of Agricultural Economists (IAAE).
Kumar, S., Xiumin, L. & Kamran, M. (2018). The Factors Affecting Nepal’s Trade: Gravity Model Analysis. European Academic Research, 5(12), 6766-6782.
MacPhee, C. & Sattayanuwat, W. (2014). Consequence of Regional Trade Agreements to Developing Countries. Journal of Economic Integration, 29 (1), 64-94.
Malhotra, N. & Soyanov, A. (2008) Analyzing the Agricultural Trade Impacts of the Canada-Chile Free Trade Agreement. Working Paper N° 8. Recuperado de https://ageconsearch.umn.edu/bitstream/46628/2/Working_Paper_2008-08_Malhotra.pdf
Martínez, I. & Nowak, F. (2003). Augmented gravity model: an empirical application to MERCOSUR-European Union trade flows. Journal of Applied Economics, 4(2), 291-316.
Milton, S. y Siddique, M. (2014). Trade creation and diversion under the Thailand-Australia Free Trade Agreement (TAFTA). Discussion Paper 14.26. University of Western Australia - Business School.
Montenegro, C. & Soloaga, I. (2006). Nafta’s trade effects: new evidence with a gravity model. Estudios de economía, 33(1), 45-63.
Ovando, W., Canales, R. A. & Munguía, G. (2017). Comercio interregional de bienes manufacturados en los países de la Alianza del Pacífico desde la Teoría de Linder. Desafíos, 29 (2). 169-197.
Tinbergen, J. (1962). Shaping the World Economy. Suggestion for an International Economic Policy. New York: The Twentieth Century Fund.
Urata, S. & Okabe, M. (2007). The Impacts of Free Trade Agreements on Trade Flows: An Application of the Gravity Model Approach. The Research Institute of Economy, Trade and Industry, 7, 1-37.
Yang, S. & Martínez, I. (2013). A panel data analysis of trade creation and trade diversion effects: the case of ASEAN-China Free Trade Area (ACFTA). Ibero-America Institute for Economic Research. Working Paper N° 224.
Anderson, J. (1979). A Theoretical Foundation for the Gravity Equation. The American Economic Review, 69 (1), 106 – 116.
Anderson, J. & Van Wincoop, E. (2003). Gravity with Gravitas: A Solution to the Border Puzzle. The American Economic Review, 93 (1), 170 – 192.
Bacaria, J., Osorio, M. & Artal, A. (2013). Evaluación del Acuerdo de Libre Comercio México-Unión Europea mediante un modelo gravitacional. Economía Mexicana, Nueva Época, 1 (1), 143-163.
BCRP. (2019). Guía Metodológica de la Nota Semanal. Lima: Departamento de Publicaciones Económicas.
Carrere, C. (2006). Revisiting the effects of regional trade agreements on trade flows with proper specification of the gravity model. European Economic Review, 50 (2), 223-247.
Gauto, V. (2012). An Econometric Analysis of trade creation and trade diversion in Mercosur: the Case of Paraguay. International Association of Agricultural Economists (IAAE).
Kumar, S., Xiumin, L. & Kamran, M. (2018). The Factors Affecting Nepal’s Trade: Gravity Model Analysis. European Academic Research, 5(12), 6766-6782.
MacPhee, C. & Sattayanuwat, W. (2014). Consequence of Regional Trade Agreements to Developing Countries. Journal of Economic Integration, 29 (1), 64-94.
Malhotra, N. & Soyanov, A. (2008) Analyzing the Agricultural Trade Impacts of the Canada-Chile Free Trade Agreement. Working Paper N° 8. Recuperado de https://ageconsearch.umn.edu/bitstream/46628/2/Working_Paper_2008-08_Malhotra.pdf
Martínez, I. & Nowak, F. (2003). Augmented gravity model: an empirical application to MERCOSUR-European Union trade flows. Journal of Applied Economics, 4(2), 291-316.
Milton, S. y Siddique, M. (2014). Trade creation and diversion under the Thailand-Australia Free Trade Agreement (TAFTA). Discussion Paper 14.26. University of Western Australia - Business School.
Montenegro, C. & Soloaga, I. (2006). Nafta’s trade effects: new evidence with a gravity model. Estudios de economía, 33(1), 45-63.
Ovando, W., Canales, R. A. & Munguía, G. (2017). Comercio interregional de bienes manufacturados en los países de la Alianza del Pacífico desde la Teoría de Linder. Desafíos, 29 (2). 169-197.
Tinbergen, J. (1962). Shaping the World Economy. Suggestion for an International Economic Policy. New York: The Twentieth Century Fund.
Urata, S. & Okabe, M. (2007). The Impacts of Free Trade Agreements on Trade Flows: An Application of the Gravity Model Approach. The Research Institute of Economy, Trade and Industry, 7, 1-37.
Yang, S. & Martínez, I. (2013). A panel data analysis of trade creation and trade diversion effects: the case of ASEAN-China Free Trade Area (ACFTA). Ibero-America Institute for Economic Research. Working Paper N° 224.
