How does trade affect the design of preferential trade agreements (PTAs)? What is the role of global value chains (GVCs)? The authors answer these questions by empirically investigating the causal impact of gross and value-added trade on the depth of PTAs. To solve the critical issue of...

This paper evaluates the role of preferential trade agreements (PTAs) in the context of global value chains. Given the interconnectedness of trade and investment, preferential trade agreements not only contribute to participation and value capture by eliminating traditional trade barriers, they...