This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Clash of Liberalizations: Preferential versus Multilateral Trade Liberalization in the European Union

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Baybars Karacaovali (Fordham University, Department of Economics)
Nuno Limao (University of Maryland, Department of Economics; NBER; CEPR)

Additional information is available for the following registered author(s):

Abstract

Preferential trade agreements (PTAs) are characterized by liberalization with respect to only a few partners and thus they can potentially clash with, and retard multilateral trade liberalization (MTL). Yet there is almost no systematic evidence on whether the numerous existing PTAs actually affect MTL. We provide a model showing that PTAs hinder MTL unless they entail accession to a customs union with internal transfers. Using product-level tariffs negotiated by the European Union (EU) in the last two multilateral trade rounds we find that several of its PTAs have clashed with its MTL. However, this effect is absent for EU accessions. Moreover, we provide new evidence on the political economy determinants of trade policy in the EU.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://stage.web.fordham.edu/images/academics/graduate_schools/gsas/economics/dp2008_02_karacaovali_limao.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Fordham University, Department of Economics in its series Fordham Economics Discussion Paper Series with number dp2008-02.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2008
Date of revision:
Handle: RePEc:frd:wpaper:dp2008-02

Contact details of provider:
Web page: http://www.fordham.edu/economics/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Fordham Economics).

Related research
Keywords: Preferential trade agreements; customs unions; multilateral trade negotiations; MNF tariff concessions; reciprocity;

Other versions of this item:

Find related papers by JEL classification:
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F15 - International Economics - - Trade - - - Economic Integration

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February. [Downloadable!] (restricted)
  2. Riedel, James, 1977. "Tariff concessions in the Kennedy Round and the structure of protection in West Germany : An econometric assessment," Journal of International Economics, Elsevier, vol. 7(2), pages 133-143, May. [Downloadable!] (restricted)
  3. Cadot, O. & De Melo, J. & Olarreaga, M., 1996. "Regional Integration and Lobbying for Tariffs Against Non-Members," University of Geneva Economics Working Papers 96.07, University of Geneva, Department of Political Economy.
    Other versions:
  4. Bohara, Alok K. & Gawande, Kishore & Sanguinetti, Pablo, 2004. "Trade diversion and declining tariffs: evidence from Mercosur," Journal of International Economics, Elsevier, vol. 64(1), pages 65-88, October. [Downloadable!] (restricted)
    Other versions:
  5. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-50, September. [Downloadable!] (restricted)
    Other versions:
  6. Pinelopi Koujianou Goldberg & Giovanni Maggi, 1999. "Protection for Sale: An Empirical Investigation," American Economic Review, American Economic Association, vol. 89(5), pages 1135-1155, December. [Downloadable!] (restricted)
    Other versions:
  7. Hiau Looi Kee & Nicita, Alessandro & Olarreaga, Marcelo, 2004. "Import demand elasticities and trade distortions," Policy Research Working Paper Series 3452, The World Bank. [Downloadable!]
    Other versions:
  8. Bond, Eric W. & Syropoulos, Constantinos, 1996. "The size of trading blocs Market power and world welfare effects," Journal of International Economics, Elsevier, vol. 40(3-4), pages 411-437, May. [Downloadable!] (restricted)
  9. Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, vol. 27(1-2), pages 25-45, August. [Downloadable!] (restricted)
    Other versions:
  10. Won Chang & L. Alan Winters, 2002. "How Regional Blocs Affect Excluded Countries: The Price Effects of MERCOSUR," American Economic Review, American Economic Association, vol. 92(4), pages 889-904, September. [Downloadable!]
  11. Nuno Limao, 2007. "Are Preferential Trade Agreements with Non-trade Objectives a Stumbling Block for Multilateral Liberalization?," Review of Economic Studies, Blackwell Publishing, vol. 74(3), pages 821-855, 07. [Downloadable!] (restricted)
    Other versions:
  12. Finger, J. Michael & Reincke, Ulrich & Castro, Adriana, 1999. "Market access bargaining in the Uruguay Round - Rigid or relaxed reciprocity?," Policy Research Working Paper Series 2258, The World Bank. [Downloadable!]
  13. Matthias Busse, 2000. "The hub and spoke approach of EU trade policy," Intereconomics: Review of European Economic Policy, Springer, vol. 35(4), pages 153-154, July. [Downloadable!] (restricted)
  14. Constantinos Syropoulos, 2002. "On Tariff Preferences And Delegation Decisions In Customs Unions: A Heckscher--Ohlin Approach," Economic Journal, Royal Economic Society, vol. 112(481), pages 625-648, July. [Downloadable!] (restricted)
  15. Finger, J M, 1976. "Effects of the Kennedy Round Tariff Concessions on the Exports of Developing Countries," Economic Journal, Royal Economic Society, vol. 86(341), pages 87-95, March. [Downloadable!] (restricted)
  16. Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September. [Downloadable!] (restricted)
    Other versions:
  17. Nuno Limão & Marcelo Olarreaga, 2006. "Trade Preferences to Small Developing Countries and the Welfare Costs of Lost Multilateral Liberalization," World Bank Economic Review, Oxford University Press, vol. 20(2), pages 217-240.
    Other versions:
  18. Kyle Bagwell & Robert W. Staiger, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March. [Downloadable!] (restricted)
    Other versions:
  19. Kyle Bagwell & Robert W. Staiger, 1997. "Regionalism and Multilateral Tariff Cooperation," NBER Working Papers 5921, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  20. Constantopoulos, Maria, 1974. "Labour protection in Western Europe," European Economic Review, Elsevier, vol. 5(4), pages 313-328, December. [Downloadable!] (restricted)
  21. Pravin Krishna, 1998. "Regionalism And Multilateralism: A Political Economy Approach," The Quarterly Journal of Economics, MIT Press, vol. 113(1), pages 227-250, February. [Downloadable!] (restricted)
    Other versions:
  22. Faezeh Foroutan, 1998. "Does Membership in a Regional Preferential Trade Arrangement Make a Country More or Less Protectionist?," The World Economy, Blackwell Publishing, vol. 21(3), pages 305-335, 05. [Downloadable!] (restricted)
  23. Kyle Bagwell & Robert W. Staiger, 2006. "What Do Trade Negotiators Negotiate About? Empirical Evidence from the World Trade Organization," NBER Working Papers 12727, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  24. Karacaovali, Baybars & Limão, Nuno, 2008. "The clash of liberalizations: Preferential vs. multilateral trade liberalization in the European Union," Journal of International Economics, Elsevier, vol. 74(2), pages 299-327, March. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nuno Lim, 2006. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States," American Economic Review, American Economic Association, vol. 96(3), pages 896-914, June. [Downloadable!]
Statistics
Access and download statistics

Did you know? IDEAS also indexes software components.

This page was last updated on 2009-11-6.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.