A new discussion paper by Antoni Estevadeordal, Caroline Freund, and Emanuel Ornelas says that regional trade deals amongst Latin American countries have been building blocks for multilateral liberalization — “there is strong evidence that preferences induce a faster decline in external tariffs in free trade areas“.

This contrasts with Nuno Limão’s results for the United States and Europe, where “multilateral tariff reductions in PTA goods were smaller than those in similar goods not imported from PTA partners.”