Does international trade improve with a free trade agreement? The case of the Pacific Alliance.

This paper evidence the effect on exports of Chile, Colombia, Mexico, and Peru after the formation of the Pacific Alliance. Latin American countries are used to estimate a counterfactual trajectory of exports within the bloc using the Synthetic Control methodology. The results show that Colombian exports increased slightly with respect to their counterfactual if this agreement had not been signed. Exports from other countries did not have an impact with the integration of the bloc. Thus, it is evident that the existence of this block did not generate greater exports among the member countries.