Trade policy uncertainty and agricultural exports: The mitigating roles of RTA and liberal democracies

In the context of heightened global uncertainty over economic and trade policies, this analysis examines how Trade Policy Uncertainty (TPU) impacts agricultural exports using two-way fixed effects and Panel Quantile Regression (PQR) methods. It studies the role of Regional Trade Agreements (RTAs) and liberal democracies in mitigating the effect of the TPU on agricultural exports. The analysis covers 15 Regional Comprehensive Economic Partnership (RCEP) countries from 1988 to 2023. The estimated results reveal that the lagged values of TPU specific to RCEP countries and the Global TPU exert negative and statistically significant effects on agricultural exports. The results of the panel quantile regression analysis reveal that the effects of the independent variables on agricultural exports are heterogeneous across different quantiles. The findings of this study suggest that regional trade agreements and higher levels of liberal democracy serve as mitigating factors, alleviating the adverse effects of trade policy uncertainty on agricultural exports. Based on these findings, our study significantly contributes to the empirical literature and offers valuable insights for policy making.