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 4 / 23 PLOS One Trade agreement, climate change and geography study, e.g., [28,29] find that complementarity and comparative advantage drastically stimulate the bilateral exports between China and Vietnam in agricultural sector based on geographical factors such as location, seashore and border sharing over time. However, partner countries have win-win situation by trading agri-based products under export-strategies. The author [1] discussed that geographic factors such as climate change potential and ocean access have a simultaneous effect on international trade. Precisely, climate change potential affects international trade through access to the oceans, indicating that the oceans are encompassed by different geographic landscapes. Thus, international trade is likely to occur in multiple aspects. Subsequently, [30,31] also argue that geographical indications, e.g., market access and protected designation of origin, have a remarkable impact on international trade. However, market access influences international trade through economic gross domestic product (GDP) by firms regarding production. Another study, e.g., [32–34], emphasizes natu- ral geography (climate change) for mitigation and adaptation through man-made geography, suggesting that geographic factors such as climate change and urbanization development have a joint effect on international trade. His research estimates potential trade-offs and conflicts between geographic factors (e.g., urbanization). Thus, trade-offs and conflicts have been

gaining traction. The trade-offs are associated with natural and man-made geographic factors such as land, energy, transport, and green infrastructure. The findings conclude that mitiga- tion measures could be impacted by increasing exposure to natural geographic factors (e.g., flooding and islands). Adaptation measures also enhance natural geographic factors (e.g., greenhouse gas emissions). However, our study contradicts this by exploring the simultaneous impact of natural and man-made geography on bilateral exports. In addition, [35] argued that transportation costs have remarkable impacts on the bilat- eral exports. The reason is that transportation costs have direct correlation with the length of routes. Precisely, the transport costs are critical and heterogenous which are measured based on geographic locations such as mountainous area, desert and seashore, landscape as well. Moreover, [36] concluded that international trade and transport infrastructure are declining as a direct result of climate change. Climate change discourages trade flow in several coun- tries. National climate change can indicate confusing decisions regarding the climate change’s effect in international trade flows. The largest domestic market and more diversified trade pat- tern can absorb the climate shocks. Furthermore, climate change may reduce the comparative advantage thereby export level could be deteriorated. Subsequently, [37] showed that direct effect of climate change adversely affects the global supply chain and trade patterns. Moreover,

extreme weather damages the transport infrastructure such as road, railway and maritime routes. Consequently, transportation costs could be higher for international trade. Although studies related to climate change and international trade are few, qualitative agreement on climate change indicates that transport infrastructure would be balanced. The [38] demonstrated that climate change could imitate modes of transportation. Another study, e.g., [39] estimated the geographic structure of Ricardian into the general equilibrium for bilateral trade that are relevant to absolute and comparative advantages and geographical barriers for trade. Their implementations explore the probabilistic design of the heterogeneity of technology in which the model spreads naturally, several countries separated by geographi- cal barriers. This design hints at a flexible framework for operating the geographical structure in the general equilibrium analysis. By extending the model for trade, which has significant application to the sensitivity of trade to input costs and geographic barriers. Moreover, given the goods, the location and its impact on input costs can play an important role. Potential gains from trade are created by comparative advantage. Author [40] concluded that economic activities geographically shifted in Japan because of the migration of skilled workers or entrepreneurs who are associated with the silk industry