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Small is Beautiful: Preferential Trade Agreements and the Impact of Country Size, Market Share, and Smuggling

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Author Info

  • Schiff, Maurice

    ()
    (The World Bank)

Abstract

This paper examines two issues: 1) the welfare impact of preferential trade agreements (PTAs), and 2) the effect of structural and policy changes on the welfare impact of PTAs. It is shown that, on the import side, the home country loses from a PTA between small countries (and the PTA as a whole loses as well); and the impact of a PTA on home country welfare is worse the higher the level (and share) of imports from the partner country. The latter result holds both in the small-country and the large- country case. The paper also examines the effects on the welfare impact of PTAs of changes in efficiency, trade policy, smuggling and rules of origin. It is shown that the impact of form - ing a PTA between small countries in the case of smuggling is ambiguous in general.

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Bibliographic Info

Article provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.

Volume (Year): 12 (1997)
Issue (Month): ()
Pages: 359-387

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Handle: RePEc:ris:integr:0054

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Web page: http://econo.sejong.ac.kr/
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Related research

Keywords: Preferential; Trade; Agreements;

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Cited by:
  1. Anna Maria Mayda & Chad Steinberg, 2007. "Do South-South Trade Agreements Increase Trade? Commodity-Level Evidence from COMESA," IMF Working Papers 07/40, International Monetary Fund.
  2. Clarete, Ramon & Edmonds, Christopher & Wallack, Jessica Seddon, 2003. "Asian regionalism and its effects on trade in the 1980s and 1990s," Journal of Asian Economics, Elsevier, vol. 14(1), pages 91-129, February.
  3. Schiff, Maurice, 2001. "Will the Real “Natural Trading Partner” Please Stand Up?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 245-261.
  4. Denise Eby Konan & Keith E Maskus, 2000. "Bilateral Trade Patterns and Welfare: An Egypt-EU Preferential Trade Agreement," Working Papers 200001, University of Hawaii at Manoa, Department of Economics.
  5. World Bank, 2005. "Global Economic Prospects 2005 : Trade, Regionalism and Development," World Bank Publications, The World Bank, number 14783, January.
  6. Lucio Castro, 2005. "Regional Trade Integration in East Africa: Trade and Revenue Impacts of the Planned East African Community Customs Union," International Trade 0509005, EconWPA.
  7. Waldkirch, Andreas, 2006. "The ‘New Regionalism’: Integration as a Commitment Device for Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 397-425.
  8. Silva, Peri, 2011. "The role of importers and exporters in the determination of the U.S. tariff preferences granted to Latin America," Journal of Development Economics, Elsevier, vol. 94(2), pages 207-219, March.
  9. Kaminski, Bartlomiej & de la Rocha, Manuel, 2003. "Stabilization and association process in the Banlkans : integration options and their assessment," Policy Research Working Paper Series 3108, The World Bank.
  10. Hoekman, Bernard & Konan, Denise, 1999. "Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade," CEPR Discussion Papers 2095, C.E.P.R. Discussion Papers.
  11. FE, Doukouré Charles, 2011. "Qualité des Institutions et Commerce International: Évidence à Partir des Exportations de l'UEMOA
    [Institutions Quality and International Trade: Evidence from WAEMU Exports]
    ," MPRA Paper 33333, University Library of Munich, Germany.

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