In order to harness globalisation various international institutions and instruments have emerged. In the international trade field, the multilateral trading system, that is the WTO materialized as a global platform for trade liberalisation and related issues. Along the same time and with similar objectives a myriad of PTAs also developed and have now become a prominent feature of international trade policy. It is not only the number and geographical spread of PTAs that has increased dramatically over the years, but the scope of these agreements has also extended well beyond trade into non-trade provisions such as foreign investment, labor market, intellectual property rights and dispute settlement mechanisms. Such developments bring several issues to the forefront. As the geographical spread widens, more and more countries are faced with the costly process of successfully negotiating these agreements to their benefit. The central question that arises in this context is that, aside from the potential benefits, what are the associated costs? These approximations (such as trade diversion, tariff revenue loss, impact on domestic production) facilitate the negotiating process of the proposed agreement. Our findings reveal that a common PTA between the labor origin country and labor host country is relevant in stimulating cross-border worker movement, and it is the presence of labor provision that makes PTAs more influential. Relatively higher income opportunities, high origin country unemployment, host or origin population growth and origin political stability positively impacts bilateral worker migration. While host political stability is not significant, lack of job opportunities in the host country is negative and significant. Moreover, consistent with the important role of information and social support emphasized in the related literature, we find that the presence of previous migrants from the same origin country is also relevant in cross-border labor mobility.
Year Manuscript Completed
Preferential trade agreements; foreign direct investment; European Union Economic Partnership Agreement; labor mobility.
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