Modeling complex network perturbations on resilience of the bilateral regional trade agreements

Abstract

The resilience of cooperative relationships within a trade agreement network, when subjected to external shocks or internal disturbances, underscores the role of network structure in the robustness and adaptability of the trade agreement system. Addressing the gap in understanding the resilience of trade agreement network dynamics, this study constructs a complex network based on the bilateral regional trade agreements. By applying reciprocal dynamics to measure cooperative relationships among countries in the network, we model the impact of complex network perturbations on the resilience of bilateral regional trade agreements. Various complex network perturbations are considered, including node removal, link removal, and three orders of null models for network reshuffling, which correspond to the failure of a trade agreement, simultaneous agreement failure, and signing. Experimental findings reveal that network resilience gradually diminishes with the random removal of nodes and links. However, when nodes are removed based on their degree, removing nodes with larger degrees first proves to be more effective than the reverse. Specifically, network resilience decreases more rapidly when smaller nodes are removed. This highlights the significant contribution of countries with numerous trade agreements to the overall network resilience. In network reshuffling experiments, an increase in the order of reshuffling correlates with a gradual decrease in network resilience, ultimately converging toward real values. These findings emphasize the importance of network structure in maintaining the stability and adaptability of trade agreement systems.