Article 3 - The Evolution of Deep Trade Agreements

Abstract

This paper takes a first look at new data on the content of Preferential Trade Agreements (PTAs). The data contain detailed information on the eighteen policy areas most frequently covered in PTAs, focusing on the stated objectives, substantive commitments, and other aspects such as transparency, procedures and enforcement. A number of new stylized facts emerge: (i) PTAs 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 PTAs 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 PTAs, with larger gaps in areas such as labor and environment; (v) PTAs are more similar within blocs, but similarity can be significant even across blocs. The paper also discusses the challenges of quantification of PTA “depth” and its effects and proposes a research agenda for future work on trade agreements.