On the Viability of a Multilateral Trade Agreement: A Political-Economy Approach
The big picture issue this paper intends to address is on the incentive aspects of a multilateral trade liberalization. The paper builds on a framework originally introduced in Grossman and Helpman's The Politics of Free-Trade Agreements (1995). The aim of that work was to explain the viability of free trade agreements (FTAs) between two countries in a political-economy framework. A simple extension to a three-country setting allows us to analyze whether FTAs are "building blocs" or "stumbling blocs". An illustration with speci c functional forms serves to nd conditions under which FTAs are, somehow, partial building blocs, i.e., a bilateral liberalization can be feasible when multilateral liberalization is not.
|Date of creation:||2010|
|Date of revision:|
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- Saggi, Kamal & Yildiz, Halis Murat, 2008.
"Bilateral trade agreements and the feasibility of multilateral free trade,"
17561, University Library of Munich, Germany, revised 26 Jun 2009.
- Kamal Saggi & Halis Murat Yildiz, 2011. "Bilateral Trade Agreements and the Feasibility of Multilateral Free Trade," Review of International Economics, Wiley Blackwell, vol. 19(2), pages 356-373, 05.
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"Negotiating Free Trade,"
3351239, Harvard University Department of Economics.
- Arvind Panagariya, 2000. "Preferential Trade Liberalization: The Traditional Theory and New Developments," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 287-331, June.
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- Vijay Krishna & Roberto Serrano, 1996. "Multilateral Bargaining," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 61-80.
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