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Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States

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  • Nuno Limao

Abstract

Most countries are members of preferential trade agreements (PTAs). The effect of these agreements has attracted much interest and raised the question of whether PTAs promote or slow multilateral trade liberalization, i.e., whether they are a "building block" or "stumbling block" to multilateral liberalization. Despite this long-standing concern with PTAs and the lack of theoretical consensus, there is no systematic evidence on whether they are actually a stumbling block to multilateral liberalization. We use detailed data on U.S. multilateral tariffs to provide the first systematic evidence that the direct effect of PTAs was to generate a stumbling block to its MTL. We also provide evidence of reciprocity in multilateral tariff reductions. (JEL: D78; F13; F14; F15)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 96 (2006)
Issue (Month): 3 (June)
Pages: 896-914

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Handle: RePEc:aea:aecrev:v:96:y:2006:i:3:p:896-914

Note: DOI: 10.1257/aer.96.3.896
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References

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  1. Kyle Bagwell & Robert W. Staiger, 2004. "Backward stealing and forward manipulation in the WTO," Discussion Papers 0405-06, Columbia University, Department of Economics.
  2. Karacaovali, Baybars & Limao, Nuno, 2005. "The clash of liberalizations : preferential versus multilateral trade liberalization in the European Union," Policy Research Working Paper Series 3493, The World Bank.
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  12. Foroutan, Faezeh, 1998. "Does membership in a regional preferential trade arrangement make a country more or less protectionist?," Policy Research Working Paper Series 1898, The World Bank.
  13. Bagwell,K. & Staiger,R.W., 1998. "An economic theory of GATT," Working papers 15, Wisconsin Madison - Social Systems.
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  15. Kyle Bagwell & Robert W. Staiger, 1997. "Regionalism and Multilateral Tariff Cooperation," NBER Working Papers 5921, National Bureau of Economic Research, Inc.
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  19. Limão, Nuno, 2005. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the US," CEPR Discussion Papers 4884, C.E.P.R. Discussion Papers.
  20. Frankel, Jeffrey A. & Stein, Ernesto & Wei, Shang-Jin, 1996. "Regional Trading Arrangements," Center for International and Development Economics Research, Working Paper Series qt5hf1z4rv, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > International Economics > International Trade
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Cited by:
  1. Bernhard Herz & Marco Wagner, 2010. "Multilateralism versus Regionalism!?," Working Papers 089, Bavarian Graduate Program in Economics (BGPE).
  2. Xuepeng Liu & Emanuel Ornelas, 2013. "Free Trade Agreements and the Consolidation of Democracy," CESifo Working Paper Series 4103, CESifo Group Munich.
  3. Baldwin, Richard, 2008. "Big-Think Regionalism: a Critical Survey," CEPR Discussion Papers 6874, C.E.P.R. Discussion Papers.
  4. Ando, Mitsuyo & Estevadeordal, Antoni & Volpe Martincus, Christian, 2009. "Complements or Substitutes? Preferential and Multilateral Trade Liberalization at the Sectoral Level," Working Papers on Regional Economic Integration 39, Asian Development Bank.
  5. Baybars Karacaovali, 2013. "Trade-Diverting Free Trade Agreements, External Tariffs, and Feasibility," Working Papers 201321, University of Hawaii at Manoa, Department of Economics.
  6. E. James, William, 2008. "Have Antidumping Measures of EU and NAFTA Members against East Asian Countries Provoked Retaliatory Responses?," ADB Economics Working Paper Series 144, Asian Development Bank.
  7. Hector Calvo-Pardo & Caroline Freund & Emanuel Ornelas, 2009. "The ASEAN Free Trade Agreement: impact on trade flows and external trade barriers," LSE Research Online Documents on Economics 28602, London School of Economics and Political Science, LSE Library.
  8. Bernard Hoekman & Will Martin & Carlos A. Primo Braga, 2009. "Trade Preference Erosion : Measurement and Policy Response," World Bank Publications, The World Bank, number 9437, January.
  9. Antoni Estevadeordal & Christian Volpe Martincus & Mitsuyo Ando, 2009. "Complements or Substitutes?: Preferential and Multilateral Trade Liberalization at the Sectoral Level," IDB Publications 9332, Inter-American Development Bank.
  10. Ngeleza, Guyslain K. & Muhammad, Andrew, 2009. "Preferential trade agreements between the monetary community of Central Africa and the European Union: Stumbling or building blocks? A general equilibrium approach," IFPRI discussion papers 859, International Food Policy Research Institute (IFPRI).
  11. Mark Copelovitch & David Ohls, 2012. "Trade, institutions, and the timing of GATT/WTO accession in post-colonial states," The Review of International Organizations, Springer, vol. 7(1), pages 81-107, March.
  12. Baybars Karacaovali, 2010. "Free Trade Agreements and External Tariffs," Fordham Economics Discussion Paper Series dp2010-03, Fordham University, Department of Economics.
  13. Marco Fugazza & Frédéric Robert-Nicoud, 2012. "The ‘Emulator Effect’ Of The Uruguay Round On United States Regionalism," UNCTAD Blue Series Papers 51, United Nations Conference on Trade and Development.
  14. Miroudot, Sebastien & Shepherd, Ben, 2012. "The paradox of “preferences”: regional trade agreements and trade costs in services," MPRA Paper 41090, University Library of Munich, Germany.
  15. William E. James, 2006. "Proposed Rules of Origin in Emerging Asia-Pacific Preferential Trade Agreements: Will PTAs Promote Trade and Development?," Working Papers 1906, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..

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