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Globalization's bystanders: Does trade liberalization hurt countries that do not participate?

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  • Stern, Robert M.
  • Deardorff, Alan V.

Abstract

This paper uses trade theory to examine the effects of trade liberalization on countries that do not participate in it. These include both countries that fail to participate in multilateral trade negotiations, and also countries that lie outside of preferential trading arrangements such as free trade areas. The analysis suggests that, while it is theoretically possible for excluded countries to gain, through improved terms of trade, from trade liberalization, several reasons suggest that they are more likely to lose.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 34 (2006)
Issue (Month): 8 (August)
Pages: 1419-1429

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Handle: RePEc:eee:wdevel:v:34:y:2006:i:8:p:1419-1429

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Web page: http://www.elsevier.com/locate/worlddev

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  1. Won Chang & L. Alan Winters, 2002. "How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR," American Economic Review, American Economic Association, American Economic Association, vol. 92(4), pages 889-904, September.
  2. Baldwin, Richard E, 1992. "Measurable Dynamic Gains from Trade," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(1), pages 162-74, February.
  3. Mayer, Wolfgang, 1984. "Endogenous Tariff Formation," American Economic Review, American Economic Association, American Economic Association, vol. 74(5), pages 970-85, December.
  4. Panagariya, Arvind & Krishna, Pravin, 2002. "On necessarily welfare-enhancing free trade areas," Journal of International Economics, Elsevier, vol. 57(2), pages 353-367, August.
  5. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers, Princeton, Woodrow Wilson School - Public and International Affairs 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  6. Drusilla K. Brown & Kozo Kiyota & Robert M. Stern, 2005. "Computational Analysis of the Free Trade Area of the Americas (FTAA)," Working Papers, Research Seminar in International Economics, University of Michigan 528, Research Seminar in International Economics, University of Michigan.
  7. Kemp, Murray C. & Wan, Henry Jr., 1976. "An elementary proposition concerning the formation of customs unions," Journal of International Economics, Elsevier, vol. 6(1), pages 95-97, February.
  8. Richardson, Martin, 1995. "Tariff revenue competition in a free trade area," European Economic Review, Elsevier, vol. 39(7), pages 1429-1437, August.
  9. Ronald Findlay & Stanislaw Wellisz, 1982. "Endogenous Tariffs, the Political Economy of Trade Restrictions, and Welfare," NBER Chapters, in: Import Competition and Response, pages 223-244 National Bureau of Economic Research, Inc.
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Cited by:
  1. Valeria Costantini & Paolo Liberati, 2011. "Technology transfer, institutions and development," Departmental Working Papers of Economics - University 'Roma Tre' 0135, Department of Economics - University Roma Tre.
  2. Bojnec, Stefan & Ferto, Imre, 2009. "Agro-food trade competitiveness of Central European and Balkan countries," Food Policy, Elsevier, Elsevier, vol. 34(5), pages 417-425, October.

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