This paper considers whether trade in regional trade agreements has shown more resilience during the COVID-19 downturn.
Using an econometric approach where a set of fixed effect controls for countries’ specific characteristics, idiosyncratic shocks and policy responses, this paper finds that trade within trade agreements was relatively more resilient against the global trade collapse of 2020.
The analysis also finds that the level of integration matters. Deep regional trade agreements have provided relatively better stability against the global shock. Importantly, the results show some heterogeneity across developing and developed countries as well as across the developing countries' regions.
