Trade Effects of Regional Trade Agreements Signed by Pacific Alliance Members: A Structural Gravity Approach

This study estimates the effects of regional trade agreements (RTAs) signed by Pacific Alliance (PA) members on trade using a structural gravity framework. Using a panel of 197 countries from 1988 to 2023, we employ Poisson pseudo-maximum likelihood estimation with exporter-time, importer-time, and country-pair fixed effects. Estimates for 62 RTAs reveal substantial heterogeneity. Once bilateral fixed effects are included, the average RTA effect becomes small and statistically insignificant. Early and deep RTAs with Asia-Pacific partners, particularly those signed by Chile and Peru, are associated with trade creation, while several agreements involving Colombia and Mexico show limited or negative effects.