A Political Economy Analysis of Preferential Trading and Multilateralism
This paper examines the impact of Free Trade Areas (FTAs) on the incentives for multilateral liberalization and challenges the contention that Free Trade Areas are superior to GATT style (multilateral) trade liberalization as a way of getting to multilateral free trade for all. Incorporating political economy factors in a model of trade with imperfect competition in segmented markets, this paper reaches two conclusions: First, that preferential arrangements which divert trade away from the rest of the world are more likely to be supported politically, and second, that such preferential arrangements will reduce member country incentives for multilateral liberalization. It is also argued that in some cases this reduction in incentives could be critical: Multilateral liberalization that is initially feasible could be rendered infeasible by preferential arrangements. The larger the trade diversion resulting from the preferential arrangement, the more likely this will be the case.
Volume (Year): 22 (1996)
Issue (Month): 4 (Fall)
|Contact details of provider:|| Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA|
Phone: (201) 684-7346
Web page: https://www.quinnipiac.edu/eea/
More information through EDIRC
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.:
- James A. Brander & Paul Krugman, 1983.
"A 'Reciprocal Dumping' Model of International Trade,"
NBER Working Papers
1194, National Bureau of Economic Research, Inc.
- Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
- James Brander & Paul Krugman, 1980. "A "Reciprocal Dumping" Model of International Trade," Working Papers 405, Queen's University, Department of Economics.
- James Brander & Paul Krugman, 1982. "A 'Reciprocal Dumping' Model of International Trade," Working Papers 513, Queen's University, Department of Economics.
- Panagariya, Arvind & Findlay, Ronald & DEC, 1994. "A political - economy analysis of free trade areas and customs unions," Policy Research Working Paper Series 1261, The World Bank.
- Levy, Philip I, 1997. "A Political-Economic Analysis of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 87(4), pages 506-19, September.
- Richard Baldwin, 1993.
"A Domino Theory of Regionalism,"
NBER Working Papers
4465, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:22:y:1996:i:4:p:477-483. 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: (Victor Matheson, College of the Holy Cross)
If references are entirely missing, you can add them using this form.