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Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the US

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  • Limão, Nuno

Abstract

Most countries are members of preferential trade agreements (PTAs). The effect of these agreements has attracted much interest and raised the question of whether PTAs promote or slow down multilateral trade liberalization, i.e. whether they are a ?building block? or a ?stumbling block? to multilateral liberalization. Despite this long-standing concern with PTAs and the lack of theoretical consensus there is no systematic evidence on whether they are actually a stumbling block to multilateral liberalization. We use detailed data on US tariff reductions during the most recent multilateral trade round to provide the first systematic evidence that the US?s PTAs were a stumbling block to its multilateral liberalization. We also provide evidence of reciprocity in multilateral tariff reductions that amplify the stumbling block effect.

Suggested Citation

  • Limão, Nuno, 2005. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the US," CEPR Discussion Papers 4884, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4884
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    Cited by:

    1. Nuno Limão & Marcelo Olarreaga, 2018. "Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 15, pages 403-426, World Scientific Publishing Co. Pte. Ltd..
    2. Safet KURTOVIC & Blerim HALILI & Nehat MAXHUNI, 2017. "The effect of preferential tariffs of the EU: Some evidence from B&H," Journal of Economics and Political Economy, KSP Journals, vol. 4(3), pages 247-262, September.
    3. Paolo Epifani & Gino Gancia, 2009. "Openness, Government Size and the Terms of Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 629-668.
    4. John Romalis, 2007. "NAFTA's and CUSFTA's Impact on International Trade," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 416-435, August.
    5. Andreas Lendle, 2007. "The ASEAN Free Trade Agreement - Building Bloc or Stumbling Bloc for Multilateral Trade Liberalization?," IHEID Working Papers 23-2007, Economics Section, The Graduate Institute of International Studies.
    6. Pedro J. Martinez Edo, 2011. "Reciprocal liberalization: Bilateral, plurilateral or multilateral?," STUDIES IN TRADE AND INVESTMENT, in: United Nations ESCAP (ed.), Trade beyond Doha: Prospects for Asia-Pacific Least Developed Countries, Studies in Trade and Investment 76, chapter 4, pages 60-94, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    7. Nuno Limão, 2018. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 13, pages 353-371, World Scientific Publishing Co. Pte. Ltd..
    8. Hoekman. Bernard & Prowse, Susan, 2005. "Economic policy responses to preference erosion : from trade as aid toaid for trade," Policy Research Working Paper Series 3721, The World Bank.

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    More about this item

    Keywords

    Preferential trade agreements; Multilateral trade negotiations; Mfn tariff concessions; Reciprocity;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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