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Welfare Implications of Regionalism in the GATT: The Presence of Foreign Ownership


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  • Jung Hur

    (National University of Singapore)

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This paper examines the welfare implications of an existence of free trade agreements (FTAs) and customs unions (CUs) in the GATT system, in the presence of cross-foreign ownership among countries. In particular, two GATT regimes are analyzed: a pure GATT regime without any regional free trade agreements, and modified GATT regime with either an FTA or a CU. This paper argues that, when foreign ownership exists significantly between the countries, no countries in the GATT have an incentive to form a regional trade agreement before they participate in multilateral tariff negotiations.

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Bibliographic Info

Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0112.

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Length: 30 pages
Date of creation: Nov 2001
Date of revision:
Handle: RePEc:nus:nusewp:wp0112

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Keywords: Most Favored Nation Clause; Free Trade Agreements; Customs Unions; Foreign Ownership;

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