A1 - Thierry Mayer
A1 - Hillel Rapoport
A1 - Camilo Umana Dajud
TI - Free Trade Agreements and the Movement of Business People
IS - 2021-10
T3 - Working Papers
KW - Covid-19
KW - Business travel
KW - Free Trade Agreements
KW - Machine Learning
KW - Text Analysis
N2 -
Many of the measures to contain Covid-19 severely reduced business travel. Using provisions to ease the movement of business visitors in trade agreements, we show that removing barriers to the movement of business people promotes trade. To do this, we first document the increasing complexity of Free Trade Agreements. We then develop an algorithm that combines machine learning and text analysis techniques to examine the content of FTAs. We use the algorithm to determine which FTAs include provisions to facilitate the movement of business people and whether those provisions are included in dispute settlement mechanisms. Using these data and accounting for the overall depth of FTAs, we show that provisions facilitating business travel indeed facilitate business travel (but not permanent migration) and, eventually, increase bilateral trade flows.

ER -