Quantifying the impact of free trade agreements (FTAs) has long been a major topic of interest to scientists and policymakers (cf. Tinbergen, 1962). Since 1986, more than 350 new free trade agreements have been notified to the WTO, different in terms of objectives, scale and scope. Overall, these agreements have a common objective: further integration by reducing tariffs, the elimination of non-tariff barriers and the harmonisation of rules. Given that non-tariff measures have become an increasingly important element of today`s free trade agreements, uncertainty about the impact of these provisions on both the scale and direction of trade has tarnished projections of the effects of future agreements and has given much fuel to the political opposition, as the recent failure of the Trans-Pacific Partnership has strongly demonstrated. There is a great empirical literature that studies the impact of free trade agreements. However, most previous studies have focused on a common average effect in all agreements or have considered the effects to be common in similar types of agreements. This column examines the heterogeneity of the effects of free trade agreements. In addition to the heterogeneity between the agreements, there is a great deal of heterogeneity within compliance. The effects of a particular agreement can be very different for two trading partners.

If we dig even deeper, we will quantify the orientation (i.e. asymmetrical) effects of any agreement; In other words, in each agreement, the measured impact of the agreement on bilateral exports, for example, from Ecuador to Colombia, can have very different effects on Colombia`s exports to Ecuador. Figure 2 shows the indicative heterogeneity measured within the agreements. Colors remain an agreement. The horizontal axis measures the impact of each agreement on trade between countries i and countries j and the vertical axis shows the measured effect of the same agreement on exports from j to i. One size does not fit all: On the heterogeneous impact of free trade agreements Subscribe to this free journal for more curated articles on this topic In a recent paper, we propose an ambitious study on the underlying determinants of heterogeneity in FHA effects (Baier et al. 2016). By borrowing existing empirical and theoretical literature on trade agreements, we construct new, theoretically motivated clues that prove empirically relevant, in order to explain not only why some agreements are in the process of creating trade – that is. The heterogeneity beyond the agreements – has been more fruitful than others, but also the way in which they can have asymmetric effects on exports compared to imports for different members – that is, . . .