The Impact of Free Trade Agreement Case Study of TIFA between the 20 OIC Member Countries and U.S.
Resty Tamara Utami (a)*, Dyah Titis Kusuma Wardani (b)

a) International Program for Islamic Economics and Finance (IPIEF), FEB, UMY. Postgraduate Building Ground Floor, Universitas Muhammadiyah Yogyakarta
Kampus Terpadu UMY. Jl. Brawijaya, Kasihan, Bantul, Yogyakarta 55183.
*resty.tamarautami[at]gmail.com

b) Department of Development Economics, FEB, UMY
Jl. Brawijaya, Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta 55183

Abstract

This study investigates the impacts of Free Trade Agreements (FTA) which focuses on analyzing trade flows, intensity of bilateral trade and export performance between OIC-member states and US Trade Investment Framework Agreement (TIFA). Using a Gravity Model, the model is estimated on a panel data set of 20-OIC member states and US as partner country of OIC countries covered a period of 15 years from 2002 until 2016. Using aggregated bilateral export data of 20 OIC-countries and US obtained from World Bank Database and UNCOMTRADE. The data was taken to evaluate the factors affecting the bilateral trade volume. The factors influence on trade flows which are studied in this study, as in: GDP, Political Stability, Exchange Rate, GDP, population, distance and language in further will be process with multiple linear regressions. It estimated result expected that inflation, exchange rate, GDP and distance has whether the significant or insignificant impact on the trade flows in bilateral trade. Beside that, this study also need an annual data to be used in analyzing Trade Intensity Index to find out the intensity of bilateral trade and Constant Market Share to see export performance of OIC-US countries. By analyzing the factors that affect trade performance this study expect to investigate trade performance between OIC-US is effective and efficient.

Keywords: OIC; Trade flows; Gravity model; Trade Intensity Index

Topic: International Conference of Islamic Economic and Financial Inclusion

Link: https://ifory.id/abstract-plain/VKTYxRCWMhnz

Web Format | Corresponding Author (Dyah Titis Kusuma Wardani)