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	Table of Contents
p. 72 of 81 BACK | NEXT I. Developing Asia and the World II. Economic Trends and Prospects in Developing Asia III. Preferential Trade Agreements in Asia and the Pacific Overview Trends in Trade and the Expansion of PTAs: Trends in World and Asian Trade Flows Diversity in of PTAs The Economic and Broader Effects of PTAS: Theoretical Arguments Effects of PTAs on Trade in Asia and the Pacific: Some Evidence Trends in Intrabloc Trade Trade Intensity Indices Gravity Model Estimation Beyond Gravity Models: Computable General Equilibrium Models Conclusions References

Asian Development Outlook 2002 : III. Preferential Trade Agreements in Asia and the Pacific

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Effects of PTAs on Trade in Asia and the Pacific: Some Evidence

The proliferation of various types of PTAs reflects the growing importance and complexity of trade networks. This section assesses the impact of PTAs on trade within and outside of Asia and the Pacific on the basis of earlier research as well as recent estimates made at ADB. The empirical research considered draws on two distinct methodologies: one applies econometric estimation to examine trade flows between countries using historical trade data, and the second relies on a simulation modeling approach to analyze the impact of policy changes (including trade liberalization under PTAs) on trade flows. As noted above, the volume of trade expanded rapidly in the 1990s and this rise was coincident with the surge in the number of PTAs. Whether existing PTAs have been trade augmenting or trade diverting is explored here using a gravity model of bilateral trade flows and examining results from global computable general equilibrium models. Before considering these results, the section first assesses the changing flows of world trade.

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