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Why a Marketplace Must Not Discriminate

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  • Langhammer Rolf J

    (Kiel Institute for the World Economy)

Abstract

This paper discusses the pros and cons of a Transatlantic Free Trade Area (TAFTA) in comparison with an informal trade-facilitating marketplace between Europe and the US. It finds considerably more cons, especially since TAFTA would be expected to produce larger, more detrimental discriminatory effects on dynamic non-member economies, mainly in Asia but also in food-exporting regions as well. Efficiency-enhancing effects are argued to be achievable under a marketplace concept which does not separate insiders from outsiders. It is also shown that in foreign direct investment (FDI) and FDI-related service trade, TAFTA seems redundant as in recent years bilateral capital and trade flows have proven to be buoyant without preferential treatment.

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Bibliographic Info

Article provided by De Gruyter in its journal Business and Politics.

Volume (Year): 11 (2009)
Issue (Month): 3 (November)
Pages: 1-25

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Handle: RePEc:bpj:buspol:v:11:y:2009:i:3:n:3

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