How Deep is the Impact of Deep Trade Agreements? An empirical analysis on a large sample

The actual impact on trade flows of preferential trade agreements (PTAs) has been debated for a long time. In light of the “deepening” occurring in PTAs, increasingly including beyond-the-border measures and non-economic goals, we reassess their effects by estimating a gravity model of trade including a large set of countries, and specifically treating the EU as a unique entity. We control for the depth of the agreements using different sets of measures. Our results confirm the positive impact of PTAs on bilateral trade flows, but also show that the larger and more complex the included provisions, the weaker is the marginal effect on trade.