Free trade agreements can broaden trade – but diversification requires more

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Free trade agreements can widen the range of goods traded, but do not automatically lead to more suppliers. This is one of the findings of a new report from the National Board of Trade.

The report examines the EU’s free trade agreements with Canada, Japan, Singapore and Vietnam, and their role in trade diversification. The results show that the agreements have increased the number of products traded in several sectors, although the effects vary considerably between agreements and industries. At the same time, the number of supplier countries has changed little.

– Free trade agreements remain an important tool for opening markets and giving firms access to a wider range of goods. However, they cannot on their own address the risks associated with concentrated supply chains. Other policy tools may also be needed for particularly critical products, says Patrik Karpaty, trade policy adviser at the National Board of Trade.

Read the full interview and download the report
Do EU Free Trade Agreements Diversify Trade? Evidence from agreements with Canada, Japan, Singapore and Vietnam