A recent USDA study was conducted to assess how bilateral trade agreements impact trade for nations. Economic Researcher Tom Vollrath says they were not surprised to learn from a general standpoint that the formation of these reciprocal trade agreements increases trade among member countries.
But, Vollrath says that the nations that didn’t have bilateral trade agreements in place usually saw their exports decline. He says the long-run estimates range from 26 to 46 percent.
Vollrath says that reciprocal trade agreements among nations over the last two decades has significantly increased. The WTO has identified 271 bilateral and regional reciprocal type of agreements in February of last year, up from 40 agreements in 1990.