Advanced Search
MyIDEAS: Login to save this paper or follow this series

Small is beautiful : preferential trade agreements and the impact of country size, market share, efficiency, and trade policy

Contents:

Author Info

  • Schiff, Maurice

Abstract

There has been a resurgence of preferential trade agreements (PTAs). This has led to renewed debate about how PTAs affect both welfare and the multilateral system. The author examines two ideas: the welfare impact of PTAs and the effect of structural and policy changes on PTAs. He asks how the PTA's effect on home-country welfare is affected by higher imports demand; the production efficiency of the partner or rest of the world; the share imported from the other partner; and the initial protection on imports from the partner. There are several findings. An individual country benefits more from a PTA if it imports less from its partner countries. A small home country loses from forming a free trade agreement with a small partner country, but gains from forming one with the rest of the world. In other words, the home country is better off as a small member of a large bloc than as a large member of a small bloc. This result need not hold if smuggling is a factor. Home country welfare after formation of a free trade agreement (FTA) is higher when imports from the partner country are smaller, whether the partner country is large or small. Welfare worsens as imports from the partner country increase. In general a PTA is more beneficial for a country with lower import demand. A PTA is also more beneficial for a country with an efficient import-substituting sector. A small country may gain from forming a PTA when smuggling is a factor.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1996/10/01/000009265_3961214192643/Rendered/PDF/multi0page.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1668.

as in new window
Length:
Date of creation: 31 Oct 1996
Date of revision:
Handle: RePEc:wbk:wbrwps:1668

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Consumption; Economic Theory&Research; Environmental Economics&Policies; Trade Policy; Markets and Market Access; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Environmental Economics&Policies; Trade and Regional Integration; Trade Policy;

Find related papers by JEL classification:

References

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.:
as in new window
  1. Baldwin, Richard, 1993. "A Domino Theory of Regionalism," CEPR Discussion Papers 857, C.E.P.R. Discussion Papers.
  2. Rolf J. Langhammer, 1992. "The Developing Countries and Regionalism," Journal of Common Market Studies, Wiley Blackwell, vol. 30(2), pages 211-232, 06.
  3. repec:fth:coluec:9596-04 is not listed on IDEAS
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Schiff, Maurice, 2001. "Will the Real “Natural Trading Partner” Please Stand Up?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 245-261.
  2. Volpe Martincus, Christian & Siedschlag, Iulia, 2010. "The Impact of South-South Preferential Trade Agreements on Industrial Development: An Empirical Test," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 69-104.
  3. Luca Brandi, 2004. "The Economy of Small States," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 145-173, November-.
  4. Schiff, Maurice, 2002. "Regional integration and development in small states," Policy Research Working Paper Series 2797, The World Bank.
  5. Burfisher, Mary E. & Robinson, Sherman & Thierfelder, Karen, 2000. "Small countries and the case for regionalism vs. multilateralism," TMD discussion papers 54, International Food Policy Research Institute (IFPRI).
  6. Hoekman, Bernard & Konan, Denise, 1999. "Deep Integration, Non-Discrimination and Euro-Mediterranean Free Trade," CEPR Discussion Papers 2095, C.E.P.R. Discussion Papers.
  7. Neil Foster-McGregor & Robert Stehrer, 2010. "Preferential Trade Agreements and the Structure of International Trade," wiiw Working Papers 61, The Vienna Institute for International Economic Studies, wiiw.
  8. Moelders, Florian, 2011. "Trade Persistence and the Limits of Trade Agreements," Proceedings of the German Development Economics Conference, Berlin 2011 58, Verein für Socialpolitik, Research Committee Development Economics.
  9. Andriamananjara, Soamiely & Schiff, Maurice, 1998. "Regional groupings among microstates," Policy Research Working Paper Series 1922, The World Bank.
  10. Andreas Waldkirch, 2004. "The 'New Regionalism': Integration as a Commitment Device for Developing Countries," International Trade 0412004, EconWPA.
  11. Denise Eby Konan & Keith E Maskus, 2000. "Bilateral Trade Patterns and Welfare: An Egypt-EU Preferential Trade Agreement," Working Papers 200001, University of Hawaii at Manoa, Department of Economics.
  12. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA.
  13. Lucio Castro, 2005. "Regional Trade Integration in East Africa: Trade and Revenue Impacts of the Planned East African Community Customs Union," International Trade 0509005, EconWPA.
  14. Kaminski, Bartlomiej & de la Rocha, Manuel, 2003. "Stabilization and association process in the Banlkans : integration options and their assessment," Policy Research Working Paper Series 3108, The World Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1668. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.