applies and the list of countries within that group. In the case where a country gains or loses eligibility for a specific trade regime, the country enters or exits the group. We observe variation over time in the list of countries that benefit under each of the trade regimes.

Product codes for tariffs are defined at a 10-digit level in the WITS database. This is a further breakdown of the 8-digit Combined Nomenclature (CN) used by the EU, of which the first six digits are taken from the Harmonized System (HS) nomenclature. Both the HS and CN nomenclature are regularly updated, eliminating some product codes, and introducing, amending or merging others. To make sure we track the same products over time, we converted and aggregated the product codes in the tariff data to a uniform HS1992 6-digit level of classification (using conversion tables from the WITS database). This is the same nomenclature as used for the import data and the most detailed classification that is shared by all countries. To aggregate tariff rates, we take simple averages across all 10-digit product codes within a 6-digit product category.

The construction of the discrete measure of market access is based on different data sources for the EU and the United States. For the EU, there is no public available information at this level of disaggregation. Therefore, we infer whether the exporter-product pair is granted preferential access from the list of products and countries affected by the various trading regimes as reported in WITS.<sup>18</sup> For the United States, the list of products and countries that are eligible for AGOA treatment is publicly available and published on the US Trade Representative, US International Trade Administration and AGOA websites.<sup>19</sup>

# **5.2 Sample**

After cleaning and merging the trade flows data with information on market access, we are left with a dataset covering 186 countries that report trade flows directed to the United States and/or the EU. For consistency, we define the EU as the 15 countries which were part of the union from the beginning to the end of the sample period (1995-2016), namely Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom. We exclude trade flows from the United States or the EU in the other imports’ dataset, as well as imports coming from a few small islands or territories characterized by conflicts.

The list of products considered in the analysis is as follows. We started as exhaustively as possible, including all available products at the 6-digit HS level (total number of products imported is 5,018 for the EU and 5,031 for the United States). We then excluded oil and arts objects, because oil dominates exports of several countries and the supply response for both types of products is likely to be different from other products. Next, we also exclude products which report missing values on their MFN tariffs in any year and products for which the MFN

> 18 The specific name in WITS are: European Union GSP, European Union GSP for LDCs (or EBA) and EU Special Incentive Arrangement  (or GSP+).

> 19 More specifically, for years 1998 to 2005, we used the data from Frazer and Van Biesebroeck (2010), which they retrieved from the US Trade Representative and US International Trade Administration. Data for years 1995-1997 and 2006-2016 have been recovered from multiple sources, but primarily from the AGOA website.

21