unctad.org | Regional trade agreements, integration and development - UNCTAD Research Paper No. 1
Regional trade agreements, integration and development - UNCTAD Research Paper No. 1
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Developing countries have become more active participants in regional trade agreements, which raise questions about how the benefits of integration are distributed.

A key concern is whether countries at the low end of the income spectrum are able to capture development gains from integration. Historically, such impacts have been difficult to identify with precision.

This paper contributes to the understanding of such issues by analysing the impact of regional integration on growth and within country inequality.

The investigation develops two measures of regional integration using trade agreement participation as a proxy for preferential trade access.

The analysis shows that regional integration leads to higher economic growth and lower within-country inequality in member countries.

The direct development effects can be further enhanced by a second transmission channel whereby a country captures indirect benefits from any agreements to which its trading partners are party.

The ability to capture gains from integration varies across developing country regional groups with developing Asia benefiting on par with the developed world.

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