The trade liberalization effects of regional trade agreements. Working paper

Recent research suggests that membership in the World Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) is not associated with more liberal trade policies. In this paper, we ask if membership in a regional trade agreement (RTA) helps to liberalize trade. Using 63 trade policy measures, we find that RTA membership has, on average, no measurable effect on a country’s trade policy. However, we also find considerable differences across RTAs, with member countries in the European Union being significantly more open and less protectionist than members in other RTAs. * We would like to thank Jen Baggs, Andrew Rose, and participants at the annual meeting of the Canadian Economics Association, the CESifo area conference on the “Global Economy”, and the World Bank/Center for Global Trade Analysis conference for valuable comments. The data set used in this paper has been graciously made available by Andrew Rose. Parts of this paper were written while the first author was an economist at the Bankgesellschaft Berlin