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The Evolution of Deep Trade Agreements

Author

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  • Mattoo,Aaditya
  • Rocha,Nadia
  • Ruta,Michele

Abstract

This paper presents new data on the content of preferential trade agreements. The data contain detailed information on the 18 policy areas most frequently covered in preferential trade agreements, focusing on the stated objectives, substantive commitments, and other aspects such as transparency, procedures, and enforcement. Several new stylized facts emerge: (i) preferential trade agreements have reduced trade-weighted average tariff rates to less than 5 percent for more than two-thirds of countries; (ii) the number of commitments in preferential trade agreements has increased over time, particularly since the 2000s and in areas aiming at facilitating flows of services, goods, and capital; (iii) deepening commitments have been accompanied by an increase in regulatory requirements, namely on enforcement; (iv) developing countries tend to have fewer commitments in preferential trade agreements, with larger gaps in areas such as labor and the environment; and (v) preferential trade agreements are more similar within blocs, but similarity can be significant even across blocs. The paper also discusses the challenges of quantification of preferential trade agreements "depth" and its effects and proposes a research agenda for future work on trade agreements.

Suggested Citation

  • Mattoo,Aaditya & Rocha,Nadia & Ruta,Michele, 2020. "The Evolution of Deep Trade Agreements," Policy Research Working Paper Series 9283, The World Bank.
  • Handle: RePEc:wbk:wbrwps:9283
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    References listed on IDEAS

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    2. Stender, Frederik & Vogel, Tim, 2023. "What role for aid for trade in (deep) PTA relations? Empirical evidence from gravity model estimations," IDOS Discussion Papers 13/2023, German Institute of Development and Sustainability (IDOS).
    3. Gordeev, Stepan & Steinbach, Sandro, 2024. "Determinants of PTA design: Insights from machine learning," International Economics, Elsevier, vol. 178(C).
    4. Jeffrey H. Bergstrand & Stephen R. Cray & Antoine Gervais, 2023. "Increasing Marginal Costs, Firm Heterogeneity,and the Gains from "Deep" International Trade Agreements," Cahiers de recherche 23-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    5. Gourdon, Julien & Gourdon, Karin & de Melo, Jaime, 2023. "A (More) Systematic Exploration of the Trade Effect of Product-Specific Rules of Origin," World Trade Review, Cambridge University Press, vol. 22(3-4), pages 421-435, October.
    6. Bergstrand, Jeffrey H. & Cray, Stephen R. & Gervais, Antoine, 2023. "Increasing marginal costs, firm heterogeneity, and the gains from “deep” international trade agreements," Journal of International Economics, Elsevier, vol. 144(C).
    7. Innwon Park, 2022. "Comparison of the Regional Comprehensive Economic Partnership and Other Free Trade Agreements," Chapters, in: Fukunari Kimura & Shandre Mugan Thangavelu & Dionisius Narjoko (ed.), Regional Comprehensive Economic Partnership: Implications, Challenges, and Future Growth of East Asia and ASEAN, chapter 3, pages 45-82, Economic Research Institute for ASEAN and East Asia (ERIA).
    8. Sébastien Miroudot & Davide Rigo, 2022. "Multinational production and investment provisions in preferential trade agreements [Intra-industry foreign direct investment]," Journal of Economic Geography, Oxford University Press, vol. 22(6), pages 1275-1308.
    9. Moonsung Kang & Innwon Park, 2022. "Korea's trade policy and performance in turbulent times," The World Economy, Wiley Blackwell, vol. 45(11), pages 3384-3397, November.
    10. Silvia Nuzzo, 2024. "‘No safe haven’: Why the GATT ‘regional exception’ does not apply to technical barriers to trade," Global Policy, London School of Economics and Political Science, vol. 15(3), pages 528-538, June.
    11. Gabriel Felbermayr & Feodora Teti, 2023. "Revisiting the Trade-Creating Effects of Non-Tariff Barriers," Rationality and Competition Discussion Paper Series 459, CRC TRR 190 Rationality and Competition.
    12. Carmen Díaz‐Mora & Erena García‐López & Belén González‐Díaz, 2022. "Bilateral servicification in global value chains and deep trade agreements," The World Economy, Wiley Blackwell, vol. 45(8), pages 2510-2531, August.

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