Public and Expert Opinions on Free Trade Agreements in South America

Objective: Free Trade Agreements (FTA) have recently drawn public attention due to political populism, alter-globalisation, and tendencies to redefine economic ties, together with the stereotype of mismatching social perception and so-called 'expert knowledge'. Confronting this stereotype may contribute to better understanding of FTA controversies and identify possible vulnerability sources at the policy implementation level. Research Design & Methods: To analyse FTA impact, meta-analysis of the literature research results was performed using the sample of eight Spanish language papers. We included models in which natural logarithm of a trade measure was regressed on FTA dummy variable with other explanatory variables following Viechtbauer (2010). Findings: With FTA dummy variable increased trade can have its sources both in trade creation and trade diversion. Also, the endogeneity issue might result in overestimation of the effect, as countries that trade more are more likely to establish a FTA. Weighted least squares fixed effects models at both the study and the model level support this notion. Unweighted least squares models for Spanish language papers are the only ones where the positive effect of FTA is not statistically significant. Implications & Recommendations: Spanish language literature gives a lot of support to the notion that FTAs are associated with higher trade. However, the exact size of the effect can be brought to question. Contribution & Value Added: Public opinion in South America seems quite supportive for FTA and economic integration. Meta-analysis results confirm positive FTA effects, supporting its use as a convincing argument for further integration.