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TunisiaEMANES Working Paper No 63: Does the depth of trade agreements matter for trade in Services?
January 27, 2023
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In recent years, deep trade agreements spread around the world and go beyond tariff reductions. We aim to test whether the depth of agreements foster trade in services. To do so, we use a structural gravity type model and build new indicators of the depth of agreements based on the number of articles that are legally enforceable and that are related to trade in services. We show that, while only the deepest trade agreement raise trade in services, the quality of institution determines how deep agreements a ect both the intensive (measured by the quantity of trade) and extensive margins of trade (measured by the number of service sectors exports and the share of the highest service exported by a country).
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