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Industrial Targeting and Free Trade Areas


Author Info

  • Grinols, Earl L.

    (U of Illinois at Urbana-Champaign)

  • Silva, Peri

    (U of Illinois at Urbana-Champaign)


In this paper we construct a mechanism where any group of nations can form a welfare enhancing free trade area and, at the same time, satisfy their industrialization targets efficiently. The mechanism does not rely on cross-country transfers and, therefore, allows each member country to reap welfare gains from the formation of the free trade area. Since industrialization targets are satisfied and neither tariff harmonization nor cross-country transfers are necessary, the mechanism presented in this paper is politically palatable.

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Bibliographic Info

Paper provided by University of Illinois at Urbana-Champaign, College of Business in its series Working Papers with number 03-0109.

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Date of creation: 2003
Date of revision:
Handle: RePEc:ecl:illbus:03-0109

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