This paper presents a baseline model that illustrates the implications of Mutual Recognition Agreements (MRAs) for excluded nations. The model shows that MRAs can harm third country exports because of a trade-diversion effect. We use highly disaggregated trade data from developed and developing nations to test whether or not MRAs have a negative effect on exports from excluded nations. In particular, we focus on the impact of a North-North MRA on the South. We find empirical evidence in support of the model; the MRA between the EU and the USA has harmed exports from Canada and the group of developing countries included in the study.
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Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number
20-2006.
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.:
Kyle Bagwell & Robert W. Staiger, 1999.
"An Economic Theory of GATT,"
American Economic Review,
American Economic Association, vol. 89(1), pages 215-248, March.
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