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Can Bilateralism Ease the Pains of Multilateral Trade Liberalization?

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Author Info
Cadot, O.
de Melo, J.
Olarreaga, M.

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Abstract

Using the influence-driven approach to endogenous trade-policy determination, we show how a free-trade agreement (FTA) with rules of origin can work as a device to compensate losers from trade liberalization. The FTA constructed in this paper is characterized by external tariff structures that are negatively correlated across member countries, ensuring efficiency gains and, through reduces average protection, compatibility with the multilateral trading system's requirements.

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Publisher Info
Paper provided by University of Geneva, Department of Political Economy in its series University of Geneva Economics Working Papers with number 98.02.

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Length: 18 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:fth:geneec:98.02

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Related research
Keywords: POLITICAL ECONOMY ; FREE TRADE;

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Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F15 - International Economics - - Trade - - - Economic Integration

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  1. Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 2000. "The Protectionist Bias of Duty Drawbacks and the New Regionalism," CEPR Discussion Papers 2559, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 2001. "Can duty-drawbacks have a protectionist bias? Evidence from MERCOSUR," Policy Research Working Paper Series 2523, The World Bank. [Downloadable!]
  3. Olivier Cadot & Jaime de Melo & Antoni Estevadeordal & Akiko Suwa-Eisenmann & Bolormaa Tumurchudur, 2002. "Assessing the effect of NAFTA's rules of origin," Research Unit Working Papers 0306, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
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