Does it Matter Who You Sign With? Comparing the Impacts ofNorth–South andSouth–South Trade Agreements on Bilateral Trade

Free trade agreements ( FTAs ) lead to a rise in bilateral trade regardless of whether the signatories are developed or developing countries. Furthermore, the percentage increase in bilateral trade is higher for S outh– S outh agreements than for N orth– S outh agreements. The results are robust across a number of gravity model specifications in which we control for the endogeneity of FTAs (with bilateral fixed effects) and also take account of multilateral resistance in both estimation (with country‐time fixed effects) and comparative statics (analytically). Our analytical model shows that multilateral resistance dampens the impact of FTAs on trade by less in S outh– S outh agreements than in N orth– S outh agreements, which accentuates the difference implied by our gravity model coefficients, and that this difference becomes larger as the number of signatories rises. For example, allowing for lags and multilateral resistance, a four‐country N orth– S outh agreement raises bilateral trade by 53% while the analogous S outh– S outh impact is 107%.