Hayakawa, KazunobuLaksanapanyakul, NuttawutMukunoki, HiroshiUrata, Shujiro2021-04-092021-04-092019-10World Bank Economic Review1564-698Xhttps://hdl.handle.net/10986/35418We examine the impact of free trade agreement (FTA) use on import prices. For this analysis, we employ establishment-level import data with information on tariff schemes, that is, the FTA and most-favored-nation schemes used for importing. Unlike previous studies, we estimate the effects of FTA use on prices by controlling for differences in importing-firm characteristics. There are three main findings. First, the effect of FTA use is overestimated when not controlling for importing firm-related fixed effects. Second, on average, firms’ FTA use reduces tariffs by 12 percentage points and raises import prices by 3.6–6.7 percent. Third, in general, we do not find a price rise resulting from the costs of complying with rules of origin.CC BY-NC-ND 3.0 IGOFREE TRADE AGREEMENTWORLD TRADE ORGANIZATIONFTAWTOTRADE LIBERALIZATIONIMPORT PRICETARIFFSJournal ArticleWorld Bank10.1596/35418