Impact of Deep Preferential Trade Agreements on Bilateral Value-Added Exports

This study investigates the impact of deep preferential trade agreements (PTAs) on bilateral value-added exports. The results indicate that deeper PTAs increase bilateral exports through reducing the trade costs and the improvement in the partner country’s governance could also promote it. The heterogeneity analysis shows that the impact of PTAs on higher-income countries is mostly driven by WTO-X clauses. Deep PTAs are more effective for countries with lower policy adjustment costs or better rules of law. This study is important for understanding the effect of PTA provisions on trade and provides a theoretical reference for countries to improve trade policies.