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Are Preferential Trade Agreements Stumbling Blocks?

Author

Listed:
  • KORNKARUN CHEEWATRAKOOLPONG

    (Department of Economics, Chulalongkorn University, Phrayathai road, Pathumwan, Bangkok 10330, Thailand)

Abstract

This paper studies the effect of preferential trade agreements (PTAs) on multilateral trading system using a sequential bargaining game. The study considers two formats of PTAs, i.e., when the PTA tariffs are specified before the formation of PTAs and when PTA members have to negotiate PTA tariffs after the formation of PTAs. The study finds that PTAs with specified tariffs can be building blocks to multilateral liberalization while PTAs without specified tariffs are stumbling blocks. The paper also concludes that PTAs can eliminate bargaining inefficiency called forward manipulation when PTA tariffs are specified before PTA negotiation.

Suggested Citation

  • Kornkarun Cheewatrakoolpong, 2012. "Are Preferential Trade Agreements Stumbling Blocks?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(04), pages 1-19.
    • Handle: RePEc:wsi:serxxx:v:57:y:2012:i:04:n:s0217590812500300
    DOI: 10.1142/S0217590812500300
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    References listed on IDEAS

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    1. Aghion, Philippe & Antras, Pol & Helpman, Elhanan, 2007. "Negotiating free trade," Journal of International Economics, Elsevier, vol. 73(1), pages 1-30, September.
    2. Arvind Panagariya & Jagdish Bhagwati, 1996. "The Economics of Preferential Trade Agreements," Books, American Enterprise Institute, number 51856, September.
    3. Andriamananjara, Soamiely, 1999. "On the size and number of regional integration arrangements - a political economy model," Policy Research Working Paper Series 2117, The World Bank.
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    More about this item

    Keywords

    Stumbling blocks; preferential trade agreement; WTO; trade negotiation; F13;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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