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Can South-South trade Liberalisation Stimulate North-South Trade ?

Author

Listed:
  • Fugazza, Marco

    (United Nations Conference on Trade and Development, Switzerland)

  • Robert-Nicoud, Frédéric

    (London School of Economics, and CEPR, UK)

Abstract

This paper uses a combination of Ethier (1982) and Melitz’s (2003) models to show that liberalizing trade among developing countries, so-called South-South trade, could contribute to improve the access to international markets of developing countries’ would-be exporters. Lower trade barriers among developing countries has the effect of lowering the price of intermediate inputs and eventually allows exporters in those countries to serve international markets. We also compare unilateral and multilateral South-South trade liberalization and find that the latter unambiguously reduces the price of intermediates in all participating countries, whereas the former has ambiguous effects.

Suggested Citation

  • Fugazza, Marco & Robert-Nicoud, Frédéric, 2006. "Can South-South trade Liberalisation Stimulate North-South Trade ?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 21, pages 234-253.
  • Handle: RePEc:ris:integr:0354
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    Cited by:

    1. Laurent Didier, 2017. "South-South Trade and Geographical Diversification of Intra-SSA Trade: Evidence from BRICs," African Development Review, African Development Bank, vol. 29(2), pages 139-154, June.
    2. repec:ilo:ilowps:468791 is not listed on IDEAS
    3. Das, Gouranga, 2010. "Globalization, socio-institutional factors and North–South knowledge diffusion: Role of India and China as Southern growth progenitors," MPRA Paper 37252, University Library of Munich, Germany, revised 01 Aug 2011.
    4. Pamela Bombarda & Elisa Gamberoni, 2013. "Firm Heterogeneity, Rules Of Origin, And Rules Of Cumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 307-328, February.
    5. Emanuele Forlani, 2010. "Competition in the Service Sector and the Performances of Manufacturing Firms: Does Liberalization Matter?," CESifo Working Paper Series 2942, CESifo.
    6. repec:spo:wpecon:info:hdl:2441/5341 is not listed on IDEAS
    7. Omar S. Dahi & Firat Demir, 2013. "Preferential trade agreements and manufactured goods exports: does it matter whom you PTA with?," Applied Economics, Taylor & Francis Journals, vol. 45(34), pages 4754-4772, December.
    8. Omar S. Dahi & Firat Demir, 2017. "South–South And North–South Economic Exchanges: Does It Matter Who Is Exchanging What And With Whom?," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1449-1486, December.
    9. Benjamin Shepherd & Patrick Messerlin, 2008. "Development Perspectives on Trade Growth at the Extensive Margin," Sciences Po publications info:hdl:2441/5341, Sciences Po.
    10. Swapan K. Bhattacharya & Gouranga G. Das, 2014. "Can South–South Trade Agreements Reduce Development Deficits?," Journal of South Asian Development, , vol. 9(3), pages 253-285, December.
    11. Sperlich, Y., 2013. "Comparing the Speed of Convergence in American Integration Areas," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 77-88.
    12. Uexküll, Erik von., 2012. "Regional trade and employment in ECOWAS," ILO Working Papers 994687913402676, International Labour Organization.

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    More about this item

    Keywords

    South-South Trade; Market Access; Input-output linkages; Value chain;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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