event
Monday
19
February
Brown Bag Lunch

Why are trade agreements copy-and-pasted, and does it affect international trade?

Julia Seiermann, Ph.D. Candidate in Development Economics
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P2-S2 ; Maison de la Paix

The texts of international trade agreements are often copy-and-pasted from previous treaties. Legal scholars put forward three types of explanations: power, learning and path dependency. This paper introduces measures of textual similarity into a gravity model of international trade to generate revealed evidence on this question. I do not find evidence for (effective) power or learning when studying the effect of trade agreement characteristics on aggregate bilateral trade flows, favoring the explanation of path dependency. This finding can also be interpreted from a policy perspective: It does not matter for bilateral trade flows whether a trade agreement text resembles the importer's, the exporter's or both partners' previous and future treaties.

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