Influence of Free Trade Agreements and Other Variables on EU Exports to Asia

Abstract

This report will provide a detailed analysis and overview of the trade from the European Union (EU) to our five chosen Asian countries; China, Japan, Vietnam, Singapore, and South Korea. The analysis will cover how export correlates with the existence of free trade agreements (FTA) and if they have any impact on the export from the EU. In the highly interconnected global economy there are a variety of challenges to navigate in a volatile environment and by taking advantage of Free Trade Agreements, economies can have an opportunity for growth and expansion. The trade agreements that exist offer more stable pathways for international trade and improved access to foreign markets, as they often aim to eliminate tariffs and other trade barriers. This quantitative study uses regression models in Stata, a statistical software, to analyze how different variables affect exports from the European Union to countries in Asia, while holding other variables constant. The results indicate that some variables significantly impact exports, but not primarily due to free trade agreements as initially hypothesized. Instead, Gross Domestic Product (GDP) had the greatest effect on exports for all countries. During the course of our research, we soon noticed that we might not arrive at our initial assumption, that increased exports were connected to free trade agreements. We finally concluded that there are other factors that affect exports, such as FTAs coinciding with Covid-19 may be a contributing factor to the fact that we can not find a particularly significant positive effect of FTA on exports.