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Previous studies on the role of FTAs in promoting membersâ€™ international trade have usually focused on FTA premium, ignoring the difference between selection effects â€“ trade developments before the formation of FTAs â€“ and â€œlearningâ€ effects â€“ trade growth after the formation of FTAs. This paper considers this difference, using a large bilateral trade panel comprising data covering more than 50 years from 178 countries. Southâ€“South FTAs and Northâ€“South FTAs are most related to the selection effect while Northâ€“North FTAs have a significant â€œlearningâ€ effect.

The Uneven Roles of FTAs: Selection Effect or 'Learning' Effect?