The impact of regional trade agreements on European exports

Abstract

This paper studies the impact of European regional trade agreements on European export patterns. Using a simple fixed effects estimation method, it appears that only the extensive margin is positively affected by trade agreements, while the impact on total exports and on the intensive margin is insignificant. This finding breaks down, however, if one distinguishes between individual European countries. There appears to be substantial heterogeneity across European Union member states. Moreover, the impact on the extensive margin can be explained by the inclusion of various trade-related aspects in trade agreements, which deepen the effective trade integration between the European Union and its trading partners. Finally, using a composite indicator capturing the intensity of trade integration across twelve recent European trade agreements, we cannot conclude that more comprehensive trade agreements enhance exports more.