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Warning: Bilateral trade agreements do not create trade

Author

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  • C. Chafer
  • S. Gil‐Pareja
  • R. Llorca‐Vivero

Abstract

Both bilateral and plurilateral trade agreements have grown in number over the past three decades, but their potential impact on trade may be different. This paper sheds light on the ex post (partial) effect of bilateral versus plurilateral trade agreements using the most recent econometric developments for the gravity equation on a dataset that covers 211 countries and territories over the period 1948–2013. Our results show that plurilateral trade agreements have significantly increased trade among trading partners, while this has not been the case for bilateral trade agreements.

Suggested Citation

  • C. Chafer & S. Gil‐Pareja & R. Llorca‐Vivero, 2022. "Warning: Bilateral trade agreements do not create trade," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 135-144, January.
    • Handle: RePEc:bla:buecrs:v:74:y:2022:i:1:p:135-144
    DOI: 10.1111/boer.12281
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