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Are Trade Blocs Building or Stumbling Blocs?

Author

Listed:
  • E. Baldwin, Richard

    () (Graduate Institute of International Studies)

  • Seghezza, Elena

    () (University of Genoa)

Abstract

The stumbling-bloc argument asserts that regionalism hinders MFN tariff cutting. If this was of first-order importance over previous decades, we should detect this in the levels of the tariffs. Using tariff line data for 23 large trading nations we find that MFN and PTA tariffs are complements, not substitutes since margins of preferences tend to be low or zero for products where nations apply high MFN tariffs. One interpretation is that regionalism is neither a building nor a stumbling bloc. Sectoral vested interests are a ‘third factor’ that generates the positive correlation between MFN and PTA tariff levels.

Suggested Citation

  • E. Baldwin, Richard & Seghezza, Elena, 2010. "Are Trade Blocs Building or Stumbling Blocs?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 276-297.
  • Handle: RePEc:ris:integr:0505
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    Citations

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    Cited by:

    1. Crivelli, Pramila, 2016. "Regionalism and falling external protection in high and low tariff members," Journal of International Economics, Elsevier, vol. 102(C), pages 70-84.
    2. repec:gen:geneem:12071 is not listed on IDEAS
    3. Bougheas, Spiros & Nelson, Doug, 2013. "On the political economy of high skilled migration and international trade," European Economic Review, Elsevier, vol. 63(C), pages 206-224.
    4. Gabriel Felbermayr & Mario Larch, 2013. "The Transatlantic Trade and Investment Partnership (TTIP): Potentials, Problems and Perspectives," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(2), pages 49-60, August.
    5. Pedro J. Martinez Edo, 2011. "Reciprocal liberalization: Bilateral, plurilateral or multilateral?," STUDIES IN TRADE AND INVESTMENT, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    6. Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, vol. 26(4), pages 711-729, September.
    7. Pramila Crivelli, 2014. "Regionalism and Falling External Protection in High and Low Tariff Members," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 14082, Institut d'Economie et Econométrie, Université de Genève.
    8. Gabriel Felbermayr & Mario Larch & Finn Krüger & Lisandra Flach & Erdal Yalcin & Sebastian Benz, 2013. "Dimensionen und Auswirkungen eines Freihandelsabkommens zwischen der EU und den USA," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 62, October.
    9. Mohd Rosli, 2013. "Book Review: Small and Medium Enterprises (SMEs) Access to Finance in Selected East Asian Economies, by Charlies Harvie, Sothea Oum and Dionisius A. Narjoko, (eds), ERIA Research Project Report 2010-1," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(2), pages 159-160, July.
    10. Sebastian Benz & Erdal Yalcin, 2015. "Productivity Versus Employment: Quantifying the Economic Effects of an EU–Japan Free Trade Agreement," The World Economy, Wiley Blackwell, vol. 38(6), pages 935-961, June.
    11. Evelyn S. Devadason, 2013. "Whither Sub-Regional Cooperation? The CLMV Perspective," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 5(2), pages 1-36, July.
    12. Sachverständigenrat zur Begutachtung der Gesamtwirtschaftlichen Entwicklung (ed.), 2014. "Mehr Vertrauen in Marktprozesse. Jahresgutachten 2014/15," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201415, April.
    13. Mavroidis, Petros C., 2011. "Always look at the bright side of non-delivery: WTO and Preferential Trade Agreements, yesterday and today," World Trade Review, Cambridge University Press, vol. 10(03), pages 375-387, July.
    14. Gabriel Felbermayr & Mario Larch & Lisandra Flach & Erdal Yalcin & Sebastian Benz & Finn Krüger, 2013. "Dimensionen und Effekte eines transatlantischen Freihandelsabkommens," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(04), pages 22-31, February.

    More about this item

    Keywords

    Regionalism; Multilateralism; Stumbling Blocs; Trade Blocs;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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