I build a multi-country model with heterogeneous firms that make durable destination-specific investments in exporting capacity to study the aggregate effects of changes in trade policy.  Using Mexican exporter level data, I show that persistence in the exporting decision varies systematically across trade partners: exporters to major export destinations are more likely to continue exporting to that destination than are exporters to minor export destinations.  When the model is calibrated to capture the positive relationship between persistence and export volume, it predicts that a trade liberalization with a minor export destination delivers both higher and faster export growth than a liberalization with a major export destination.  Panel data analysis on bilateral exports and free trade agreements between country pairs is consistent with these predictions, confirming that the model is better able to capture aggregate export behavior after liberalizations than other models commonly used in the literature.  Finally, I explore the welfare implications and aggregate dynamics of a global liberalization that reduces all bilateral tariffs from their current level to zero.

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