Brexit and Canadadvent: An application of graphs and hypergraphs to recent international trade agreements

Abstract

This paper uses a network approach to study the relationship between trade agreements and trade flows. For the first time in the literature, hypergraphs are used to capture the topology of trade agreements, while the usual graphs are used to represent trade flows. For our analysis, we focused on a snapshot of data from July 2017, before CETA as an agreement in force only in September 2017. An analysis of modularity conducted on both the trade agreements and the trade flows shows an imperfect correspondence between the communities of countries found within the two networks. Although the motivations of Brexit were multiple and, for the most part, far from commercial concerns, Brexit appears as a way to reconcile the networks of flows and agreements. On the other hand, Canada already belonged to the European cluster of trade agreements before the CETA agreement, which therefore appears only as an ex post confirmation of an existing situation.