THE NEW WAVE OF REGIONALISM: DOES OUTSIDER/INSIDER STATUS AFFECT THE COMPETITIVENESS OF U.S. AGRICULTURAL EXPORTS?

Abstract

The degree to which countries are pursuing regional trade agreements (RTAs) has been nothing short of extraordinary. The topic of regional integration is “breeding concern” among academics and policymakers as to the intra- and extra-regional effects of these agreements. This study constructs and uses an updated database of agricultural trade flows from 1992-2008 to shed light on the degree to which insider and outsiders status affects U.S. agricultural exporters and its competing suppliers. Regarding outsider status, we modify the existing approach by incorporating region-specific extra-bloc trade flow variables to examine the degree to which RTAs divert trade from specific regions of the world. The results are quite illuminating. While RTAs may not be trade diverting on net, all RTAs considered exhibit trade diversion with respect to at least some regions. The results have important policy implications for nations that are not actively participating in the latest wave of regionalism.International Relations/Trade,