Hubs and Spokes, and Free Trade in the Americas
This paper compares two possible formats for free trade in the Americas: a system of spokes surrounding a U.S. hub, and a free trade area. The paper identifies the sources of welfare change, and it argues that a country's attitude towards a system depends on whether the arrangement is a complement or a substitute trading club. The paper argues also that rent-seeking activities, and costs of administration and transportation, are likely to be higher in a hub-and-spoke system than in a free trade area.
|Date of creation:||Oct 1992|
|Date of revision:|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- David Cox & Richard G. Harris, 1986. "A Quantitative Assessment of the Economic Impact on Canada of Sectoral Free Trade with the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 19(3), pages 377-94, August.
- Carsten Kowalczyk, 1990. "Welfare and Customs Unions," NBER Working Papers 3476, National Bureau of Economic Research, Inc.
- Jones, Ronald W, 1969. "Tariffs and Trade in General Equilibrium: Comment," American Economic Review, American Economic Association, vol. 59(3), pages 418-24, June.
- Ronald J. Wonnacott, 1975. "Canada's Future in a World of Trade Blocs: A Proposal," Canadian Public Policy, University of Toronto Press, vol. 1(1), pages 118-130, Winter.
- Ronald J. Wonnacott, 1982. "Controlling Trade and Foreign Investment in the Canadian Economy: Some Proposals," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 567-85, November.
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