Consequences of FTA Withdrawal: Evidence from "Uxit"

We use a unique case study to estimate the effect of withdrawing from free trade agreement on international trade. Lately, political opposition economic cooperation has been rise, but little is known about how withdrawal affects analyze quasi-natural experiment provide first empirical evidence. In 2004, Estonia joined European Union, which mandated that it withdraws its FTA with Ukraine (“Uxit”). Based gravity model trade, we evidence triple difference–in–differences as well PPML panel estimations volumes between and fell by more than 20%. find an revokes all benefits no institutional memory left behind. General equilibrium estimates suggest led noticeable loss in welfare members.