ABSTRACT
Although great claims are made (positive and negative) about the development effects of trade agreements they are based on few rigorous ex post analyses. This chapter examines what is known about the effects of trade agreements, the reasons for gaps in knowledge and what all this means for forecasting ‘big events’ such as the potential wholesale shuffling of trade agreements consequent upon the UK’s departure from the European Union (known as Brexit). The literature is quite good at estimating the effect of free trade agreements (FTAs) on the parties’ trade flows, but the jury is still out on the impact of FTAs on investment, employment, income distribution and the environment.
