Future of Global Trade Governance: Impact of Export Promotion Agencies (EPAs) and Trade Facilitation Agreements (TFAs) on Economic Prosperity

Abstract

 In recent years the debate over the issue of International tradegovernance is getting intense. This has been visualized either rule-based governance (Global integration) or relation-based governance (Regional integration). However the latter is considered more flexible in adaptability as compared to the former. The present study hypothesizes that EPAs and Trade Facilitation Agreements (TFAs) have positive impact on economic prosperity of nations. The nature of the data is panel and has been collected for the time period 1990-2015. The sources of data are World Development Indicator (WDI), United Nation Trade and Development (UNCTAD) and Economic Freedom of the World (EFW). The data is comprised of four sub panel i.e. Latin American countries (LAC), Middle East & North Africa (MENA), European Economic Area (EEA), and Sub Saharan African Countries (SSA) including total of 128 nations. Mean Group, Pooled Mean Group and Difference Fixed Estimators techniques have been employed to analyze the dataset both from short run and long run perspective. Generally the finding reported that EPAs and TFAs have positive impact on economic growth of all sub panels i.e. LAC, MENA, SSA, and EEA. However the extent of the impact varied for developing and developed nations. Specifically the results showed that EPAs and TFAs are not efficiently working in case of SSA region as compared to others. Similarly for MENA region the factors like exchange rate, distance and time to trade didn’t show significant impact on their economic growth. From the analysis it can be recommended that developing countries should increase their share of expenditures for EPAs and Trade Facilitation Agreement (TFAs) which can assist traders to shift their exports of informal traded goods to formal traded goods across regions by incentivizing them in various ways.