The Value of Deep Trade Agreements in the Presence of Pricing-to-Market

Do preferential trade agreements (PTAs) lead to greater market integration, more intense competition and less market power for firms? This paper integrates the detailed data on 257 preferential trade agreements from the World Bank's Deep Trade Agreements (DTA) database with administrative customs datasets of product-level exports by firms from thirteen developing and emerging countries to estimate the responsiveness of firm-level exports, export prices, and destination-specific markups to trade and domestic policy commitments enshrined in deep trade agreements. The findings suggest that both the direct and indirect effects of deep trade agreement provisions on export sales are quantitatively significant. Perhaps more interestingly, the finding of a suggestive evidence of a pro-competitive effect of PTAs