EU trade agreements and external differentiation: a large language model approach

The EU’s trade agreements with third countries exhibit varying degrees of align-ment with intra-EU rules. What factors explain this external differentiation? Thisarticle answers this question by relying on a large language model to measurethe alignment of 62 EU trade agreements with intra-EU rules at the level of indi-vidual topics, such as trade in goods, intellectual property rights, or sustainabledevelopment. The results indicate that this alignment is higher for third countries(1) with large trade flows with the EU; (2) with an EU membership perspective;and (3) with a medium level of regulatory capacity. These associations are partic-ularly pronounced for provisions tackling behind-the-border trade barriers. Thesefindings contribute to the literature on external differentiation and advance ourunderstanding of EU trade policy and preferential trade agreements.