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of the ACC on bilateral trade flows was not robust. A very similar result can be reported for
the agreement concluded with the EFTA countries. Also the estimation results obtained for
particular bilateral agreements of Israel and Turkey as well as between themselves are not
robust. Out of the agreements concluded with the NAFTA countries only the agreement with
the US seems to affect bilateral exports of the MPCs.
Summing up, in contrast to bilateral imports the new generation EU Association
Agreements do not seem to contribute positively to the expansion of exports from the MPCs
to the EU. This means that the EU countries will be the main beneficiaries of these
agreements, at least in the short run, as the EU markets for industrial products have been open
to the MPCs since the 1960s and the 1970s while the markets for agricultural products still
remain relatively closed.
Estimates for particular MPCs
To gain a deeper insight into what drives our empirical results we split our sample into seven
subsamples for particular MPCs and estimate the gravity equations for their bilateral exports
and imports separately for each country using the traditional OLS method with robust
standard errors. 31 The estimation results for bilateral imports of the individual MPCsare
presented in Table 4 while for bilateral exports in Table 5.
31 Unfortunately, in the case of single country regressions it is not possible to use panel data estimation
techniques as the indicator variables are then collinear with the country-pair specific fixed effects.
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