Competitive Liberalization or Competitive Diversion? The Relationship between Preferential Trade Agreements and the Multilateral Trading System
AbstractThis article discusses whether the current proliferation of preferential trade agreements-the so-called "competitive liberalization"-encourages evolution toward multilateral free trade. It argues that countries pursuing preferential trade initiatives are in pursuit of the economic rents resulting from the trade diversion associated with trade preference (or discrimination). By lowering the margin of preference, multilateral trade liberalization reduces those rents and is likely to be resisted by members of trade-diverting preferential blocs. Future preferential agreements should be designed to be less trade diverting in order to be more compatible with the objective of global free trade.
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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0305002.
Length: 14 pages
Date of creation: 09 May 2003
Date of revision:
Note: Type of Document - Word - PDF; prepared on IBM PC ; to print on HP/PostScript/Franciscan monk; pages: 14 ; figures: included
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competitive liberalization Regionalism Multilateralism;
Find related papers by JEL classification:
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F15 - International Economics - - Trade - - - Economic Integration
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-05-15 (All new papers)
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