The depth of preferential trade agreements

Publication Type

Journal Article

Publication Date

4-2026

Abstract

Preferential trade agreements (PTAs) have increased rapidly in number since the 1990s and have extended their traditional focus on tariff reduction to include deeper integration in policy areas beyond the WTO mandates. This paper uses a comprehensive dataset on the content of PTAs and proposes two new measures of PTA depths, to quantify the impacts of PTA depths on bilateral trade flows and national welfare across the world for the period 1980–2015. We also develop an iterated estimation and bootstrap procedure to estimate the GATT/WTO membership effects on trade costs within the same structural framework and evaluate the interaction of PTA depths and the GATT/WTO. The results indicate that PTAs that are deeper (by different definitions) contribute to larger trade growth and welfare gains, and the depth of PTAs enhances the complementarity between regional integration (via PTAs) and multilateral trade liberalization (via GATT/WTO).

Discipline

International Economics | International Trade Law

Research Areas

International Economics

Publication

IMF Economic Review

ISSN

2041-4161

Identifier

10.1057/s41308-025-00296-9

Publisher

Springer

Additional URL

https://doi.org/10.1057/s41308-025-00296-9

Link to Full Text

Share

COinS