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

The degree to which countries are pursuing regional trade agreements (RTAs) has beennothing short of extraordinary. The topic of regional integration is “breeding concern”among academics and policymakers as to the intra- and extra-regional effects of theseagreements. This study constructs and uses an updated database of agricultural tradeflows from 1992-2008 to shed light on the degree to which insider and outsiders statusaffects U.S. agricultural exporters and its competing suppliers. Regarding outsiderstatus, we modify the existing approach by incorporating region-specific extra-bloc tradeflow variables to examine the degree to which RTAs divert trade from specific regions ofthe world. The results are quite illuminating. While RTAs may not be trade diverting onnet, all RTAs considered exhibit trade diversion with respect to at least some regions. Theresults have important policy implications for nations that are not actively participating inthe latest wave of regionalism.