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Can South-South Trade Liberalisation Stimulate North-South Trade?

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  • Fugazza, Marco
  • Robert-Nicoud, Frédéric

Abstract

This paper uses a combination of Ethier (1982) and Melitz's (2003) models to show that liberalizing trade among developing countries, so-called South-South trade, could contribute to improve the access to international markets of developing countries' would-be exporters. Lower trade barriers among developing countries has the effect of lowering the price of intermediate inputs and eventually allows exporters in those countries to serve international markets. We also compare unilateral and multilateral South-South trade liberalization and find that the latter unambiguously reduces the price of intermediates in all participating countries, whereas the former has ambiguous effects.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5699.

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Date of creation: Jun 2006
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Handle: RePEc:cpr:ceprdp:5699

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Related research

Keywords: input-output linkages; market access; South-South trade; value chain;

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References

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Citations

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Cited by:
  1. Benjamin Shepherd & Patrick Messerlin, 2008. "Development Perspectives on Trade Growth at the Extensive Margin," Sciences Po publications info:hdl:2441/5341, Sciences Po.
  2. Das, Gouranga, 2010. "Globalization, socio-institutional factors and North–South knowledge diffusion: Role of India and China as Southern growth progenitors," MPRA Paper 37252, University Library of Munich, Germany, revised 01 Aug 2011.
  3. Pamela Bombarda, Elisa Gamberoni, 2008. "Firm Heterogeneity, Rules of Origin and Rules of Cumulation," IHEID Working Papers 09-2008, Economics Section, The Graduate Institute of International Studies.
  4. Omar S. Dahi & Firat Demir, 2013. "Preferential trade agreements and manufactured goods exports: does it matter whom you PTA with?," Applied Economics, Taylor & Francis Journals, vol. 45(34), pages 4754-4772, December.
  5. Emanuele Forlani, 2010. "Competition in the Service Sector and the Performances of Manufacturing Firms: Does Liberalization Matter?," CESifo Working Paper Series 2942, CESifo Group Munich.
  6. Sperlich, Y., 2013. "Comparing the Speed of Convergence in American Integration Areas," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 77-88.
  7. repec:spo:wpecon:info:hdl:2441/5341 is not listed on IDEAS
  8. Von Uexkull, Erik, 2012. "Regional trade and employment in ECOWAS," ILO Working Papers 468791, International Labour Organization.

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