Regional trade agreements and global maize exports

What is it about?

Globalisation has a significant influence on international agriculture commerce. We investigate the influence of regional trade agreements (RTAs) and globalisation on international maize commerce from 1996 to 2020. Despite globalisation, the data suggest that distance has a greater detrimental impact on bilateral maize trade than on the industrial sector. Distance appears to be a key component in determining trade patterns in commodity markets, especially maize. Generally, RTAs are preceded by a deepening of bilateral trade relations. The amount of bilateral commerce and RTA participation have a mutually beneficial feedback loop. The development of a common RTA membership and its trade-stimulating consequences, on the other hand, are not immediately obvious.

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Photo by Amy Baugess on Unsplash

Photo by Amy Baugess on Unsplash

Why is it important?

Our findings show three critical temporal limits in the adoption of the RTA as a tool to promote international commerce and maize free movement. To begin, RTAs are normally finalised between parties who are already trading with one another; RTAs are frequently concluded years after maize commerce between two nations has begun. Second, it takes years for RTAs to have a positive impact on commerce. Third, there is a time lag before the agreements' impact, with no meaningful trade-enhancing effect detected after the 15th year following their conclusion.

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