Climate change, geography and trade agreements: A perspective of Asian bilateral trade

PLOS One | https://doi.org/10.1371/journal.pone.0320363 April 25, 2025 3 / 23 PLOS One Trade agreement, climate change and geography competition policy and environmental standards. Some studies, e.g., [23] and [24] analyzed the impact of WTO + and WTOx on trade flows separately based on distinction structure. Their findings are contradicted to each other in relationship between trade and WTOx clauses. However, a scanty analysis was considered WTOx clauses as a substantial aspect evaluated by numerous studies. Each area of WTOx remained to be unidentified as a certain contribution. Thus, this paper emphasizes on clauses in WTOx category by presenting the labor mobility, competition policy, capital mobility and environmental standards [25]. The present study aims to analyze the simultaneous influence of geographic factors, climate change, and trade agreements on Asian bilateral exports and investigate how geographic factors significantly impact exports. Estimating the influence of geographic factors on exports gives a clear picture of the amount of investment needed to improve man-made or natural resources. This study adds to the literature by exploring geographic factors that affect bilateral exports. Related literature has failed to incorporate the estimation of the simultaneous impact on bilateral exports. Simultaneous impact identifies whether natural or man-made geographic factors (e.g., physical distance, ocean access, and shared common border) separately affect bilateral exports. Moreover, a contribution includes the one-belt, one-road regions, especially

Asian countries, which are the most diverse geographically. In addition, this paper adds value by investigating the role of trade agreements in bilateral exports in depth. The clauses of the WTOx distinction provide pathways to ensure the environmental standards, safeguards, and quality of exported commodities. Thus, it is essential to investigate the effect on bilateral exports. Lastly, this study links climate change (CO2) emissions and gross domestic product (GDP) with bilateral exports to estimate substitutability and simultaneous impact. We use panel data at the bilateral level for 46 Asian countries and utilize export equa- tions, including control variables. The heterogeneity of a country’s characteristics supports the adoption of controlling approaches that are correlated or uncorrelated with explanatory variables and error terms in this model. Moreover, this paper deals with potential bias due to heterogeneity and model selection preconceptions by using the [26]. The outcomes illustrate that developments in geographical factors can expand the export level between the countries. Improving the quality and quantity of natural geographic factors enhances bilateral exports. Besides, the results indicate that both geographic factors complement each other when deter- mining the bilateral export level between trading partners. We attempt to reverse the poten- tial reverse causality of exports to geography, climate change, and trade agreements through changes in the measurement scale, which cannot affect the export volume.

The discussions in the different sections are as follows: Related studies are explained in the previous work section. The conceptual framework, estimation model, and econometric tools are presented in the methodology section. The experiment and discussions are reported in the discussion section. The conclusions section concludes with recommendations and future research directions. Previous work Several studies have explained the effects of geographic factors, CO2 emissions, and trade agreements on international trade based on different models. However, our concern is esti- mating the simultaneous impact on bilateral exports by considering geographic factors. Nexus between geographic factors and trade This strand of literature explains the correlation between geographic factors and trade. Several studies, e.g., [27] argued that climate change have remarkable impact on trade approximately 54% and 56% in high-income and upper-medium income countries respectively. Another