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The breadth of preferential trade agreements and the margins of exports

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  • Falvey, Rod

    (Bond Business School, Bond University)

  • Foster-McGregor, Neil

    (UNU-MERIT)

Abstract

We use recently available data on the core economic provisions of PTAs to identify which (types of) provisions seem to promote bilateral exports and the intensive and extensive margins of exports. Our evidence suggests that measures applied at the border tend to be aimed at expanding existing trade, while measures applied behind the border are aimed at creating trade in new products. Preferential measures tended to increase bilateral total exports and bilateral exports at the intensive margin, but have no significant effect on bilateral exports at the extensive margin. Measures applied on an MFN basis are unlikely to provide improved market access for PTA partners. When includeds individually we find that no provision has a statistically significant effect of the same sign on both trade margins, confirming the view that existing and potential exporters have opposing interests in PTA formation. Finally, we provide estimated effects for selected PTAs.

Suggested Citation

  • Falvey, Rod & Foster-McGregor, Neil, 2019. "The breadth of preferential trade agreements and the margins of exports," MERIT Working Papers 2019-012, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2019012
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    More about this item

    Keywords

    PTA Breadth; Trade Margins; Gravity Equation;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

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