Congressional Budget Office

How Preferential Trade Agreements Affect the U.S. Economy Congressional Budget Office

Preferential trade agreements (PTAs) are treaties that remove barriers to trade and set rules for international commerce between two countries or among a small group of countries. PTAs directly affect a country's economy by altering its flows of trade and investment. Primarily through trade, PTAs indirectly affect other aspects of a country's economy-such as productivity, output, and employment. As of August 2016, the United States had established 14 PTAs with 20 of its trading partners. This report surveys the economic literature on trade and PTAs and summarizes that literature's findings on how trade and PTAs have affected the U. S. economy.