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The evolution of preferential trade under regional trade agreements: Has anything changed?

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  • Acharya, Rohini
  • Parajuli, Thakur

Abstract

This paper examines the evolution of global merchandise trade, between 2010 and 2022, assessing the share of imports subject to regional trade agreements (RTAs). A key question for us is whether the share of merchandise trade subject to preferences has kept pace with the proliferation in RTAs. The paper finds that with the growing number of RTAs over the period, the share of the total volume of global imports involving RTA partners increased from 37% in 2010 to 52% in 2022. However, potential preferential imports between them under RTAs remained relatively stable, rising slightly from almost 17% in 2010 to 23% in 2022. Moreover, we find that on average 80% of global imports which do not fall under RTA preferences continued to dominate global merchandise trade between 2010 and 2022. Using tariff-line level import data for 157 customs territories and their RTAs, we find that, to a large extent, an increase in MFN duty-free imports globally has limited the scope of preferential imports under RTAs, highlighting the continued significance of MFN principles in international trade.

Suggested Citation

  • Acharya, Rohini & Parajuli, Thakur, 2025. "The evolution of preferential trade under regional trade agreements: Has anything changed?," WTO Staff Working Papers ERSD-2025-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:311210
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    References listed on IDEAS

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    1. Aaditya Mattoo & Nadia Rocha & Michele Ruta & Aaditya Mattoo, 2020. "Handbook of Deep Trade Agreements," World Bank Publications - Books, The World Bank Group, number 34055, April.
    2. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.
    3. Gonciarz, Tomasz & Verbeet, Thomas, 2025. "Significance of Most-Favoured-Nation terms in global trade: A comprehensive analysis," WTO Staff Working Papers ERSD-2025-02, World Trade Organization (WTO), Economic Research and Statistics Division.
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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