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Trade negotiations when market access matters

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  • Monika Mrazova

Abstract

This paper analyses GATT/WTO trade negotiations in an oligopolistic multi-country setting and identifies a new rationale for trade agreements.� When set unilaterally, tariffs are inefficiently high, both for familiar terms-of-trade reasons, but also to restrict market access of foreign firms.� Trade agreements neutralise both the terms-of-trade and the market-access externalities and help countries reach efficient tariff levels.� The paper further studies various kinds of asymmetries in trade negotiations.� It is shown that the multilateral negotiations system can sustain only a certain level of free-riding which suggests why multilateralism was successful in the past, but is currently stalling.

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Bibliographic Info

Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 447.

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Date of creation: 01 Sep 2009
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Handle: RePEc:oxf:wpaper:447

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Keywords: Trade negotiations; Trade liberalization; GATT/WTO; Multilateralism;

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Cited by:
  1. Hector Calvo & Gregory Corcos & Emanuel Ornelas & Facundo Albornoz, 2010. "Sequential Exporting," 2010 Meeting Papers 1065, Society for Economic Dynamics.
  2. Soegaard, Christian, 2013. "An Oligopolistic Theory of Regional Trade Agreements," The Warwick Economics Research Paper Series (TWERPS) 1007, University of Warwick, Department of Economics.

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