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Can Bilateral Trade Agreements Help Induce Free Trade

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Author Info
Raymond Riezman

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Abstract

In this paper, a very simple question is asked. Does the fact that trading blocs can form bilateral trade agreements make free trade less likely to occur? The answer is that it depends on the size distribution of the trading blocs. When there is one large trading block along with some smaller ones, then bilateral trade agreements can facilitate the attainment of free trade. If trading blocs are of roughly equivalent size, then bilateral trade agreements allow groups of trading blocs to more effectively monopolize world trade, in which case they may make free trade less likely.

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File URL: http://economics.ca/cgi/xms?jab=v32n3/10.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 32 (1999)
Issue (Month): 3 (May)
Pages: 751-766
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:cje:issued:v:32:y:1999:i:3:p:751-766

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Bhagwati, J. & Panagariya, A., 1996. "Preferential Trading Areas and Multilateralism: Strangers, Friends or Foes?," Discussion Papers 1996_09, Columbia University, Department of Economics.
  2. repec:fth:coluec:9596-04 is not listed on IDEAS
  3. Kowalczyk, Carsten & Sjostrom, Tomas, 1994. "Bringing GATT into the Core," Economica, London School of Economics and Political Science, vol. 61(243), pages 301-17, August. [Downloadable!] (restricted)
    Other versions:
  4. Gatsios, Konstantine & Karp, Larry, 1991. "Delegation Games in Customs Unions," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 391-97, April. [Downloadable!] (restricted)
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  5. Haverman, J.D., 1993. "Some Welfare Effects of Dynamic Customs Union Formation," Papers 93-109, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
  6. Bond, Eric W. & Syropoulos, Constantinos, 1996. "The size of trading blocs Market power and world welfare effects," Journal of International Economics, Elsevier, vol. 40(3-4), pages 411-437, May. [Downloadable!] (restricted)
  7. Richardson, Martin, 1993. "Endogenous protection and trade diversion," Journal of International Economics, Elsevier, vol. 34(3-4), pages 309-324, May. [Downloadable!] (restricted)
  8. Lawrence H. Summers, 1991. "Regionalism and the world trading system," Proceedings, Federal Reserve Bank of Kansas City, pages 295-301.
  9. Cole, Harold L. & Obstfeld, Maurice, 1991. "Commodity trade and international risk sharing : How much do financial markets matter?," Journal of Monetary Economics, Elsevier, vol. 28(1), pages 3-24, August. [Downloadable!] (restricted)
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  10. John Kennan & Raymond Riezman, 1990. "Optimal Tariff Equilibria with Customs Unions," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 70-83, February. [Downloadable!] (restricted)
  11. Carsten Kowalczyk, 1990. "Welfare and Customs Unions," NBER Working Papers 3476, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Frankel, Jeffrey A & Stein, Ernesto & Wei, Shang-Jin, 1996. "Regional Trading Arrangements: Natural or Supernatural," American Economic Review, American Economic Association, vol. 86(2), pages 52-56, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mrazova, Monika & Vines, David & Zissimos, Ben, 2009. "Is the WTO's Article XXIV Bad?," CEPR Discussion Papers 7144, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Kose, M. Ayhan & Riezman, Raymond, 2000. "Small Countries and Preferential Trade Agreements "How Severe is the Innocent Bystander Problem?"," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Lisandro Abrego & Raymond Riezman & John Whalley, 2002. "How Often Are Propositions On The Effects Of Regional Trade Agreements Theoretical Curiosa And When Should They Guide Policy?," UWO Department of Economics Working Papers 20024, University of Western Ontario, Department of Economics. [Downloadable!]
  4. Saggi, Kamal & Yildiz, Halis Murat, 2009. "Bilateralism, multilateralism, and the quest for global free trade," MPRA Paper 17558, University Library of Munich, Germany. [Downloadable!]
  5. Emanuel Ornelas, 2000. "Free Trade Areas with Politically Active Oligopolies," Econometric Society World Congress 2000 Contributed Papers 1457, Econometric Society. [Downloadable!]
  6. Baldwin, Richard, 2008. "Big-Think Regionalism: a Critical Survey," CEPR Discussion Papers 6874, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Ben Zissimos, 2007. "Why are Trade Agreements Regional?," Working Papers 2007.67, Fondazione Eni Enrico Mattei. [Downloadable!]
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