Since 1950, international trade has increased by more than 400 times. In the same period, especially during the 1990s, preferential trade agreements have risen significantly. However, until the publication of this dashboard, it used to take a lot of work to identify and understand the current situation in terms of trade coverage and the number of agreements, both for the world and specific countries or regions.
Infodash solved that problem. By using different sources and merging large datasets, Infodash created and systemized information related to trade agreements and trade in goods and services. The database covers almost 200 countries and each bilateral relationship, detailing the existence of preferential trade agreements, the type of agreement, and the amount of trade, for the period 2005-2017.
There are many types of Preferential Trade Agreements (PTA). In particular, we follow the standard classification:
- Non-Agreement: the importer does not give any preferential treatment to the exporter;
- Non-Reciprocal Preferential Agreement (NRPA): the exporter has some type of preferential treatment on a specific universe of goods; the most typical case is under the Generalized System of Preferences (GSP), where developed countries grant special treatment on some products to countries classified as Developing or Least-Developed Countries;
- Preferential Trade Arrangements (PFTA): in a similar way to NRPA, the exporter has some type of preferential access; usually, the agreement coverage is higher than the one under NRPA or GSP;
- Free Trade Agreements (FTA): both countries give each other a high level of preferential treatment over almost every good;
- Customs Unions (CU): countries have agreed on having the same custom or economic market, such as MERCOSUR or the European Union. This is the highest level of integration between countries.
On the other hand, it is extremely important to point out two limitations of the dashboard. First, the database might not contain every trade agreement that currently applies between countries since the database uses notifications to the WTO as the primary source of information. However, those missing agreements should not substantially modify the main indicators. Second, we do not know, for each agreement, how many goods are covered or have preferential treatment. In other words, the dashboard estimates how much trade is made between countries with some type of PTA, but we cannot know what share of goods is traded under trade agreements.