Can Bilateralism Ease the Pains of Multilateral Trade Liberalization?

Details

Serval ID
serval:BIB_5F0765AC2E4B
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Can Bilateralism Ease the Pains of Multilateral Trade Liberalization?
Journal
European Economic Review
Author(s)
Cadot O., De Melo J., Olarreaga M.
ISSN
0014-2921
Publication state
Published
Issued date
01/2001
Peer-reviewed
Oui
Volume
45
Number
1
Pages
27-44
Language
english
Abstract
Using the influence-driven approach to endogenous trade-policy determination, we show how a free-trade agreement (fta) with rules of origin can work as a device to compensate losers from trade liberalization. The fta constructed in this paper is characterized by external tariff structures that are negatively correlated across member countries, ensuring e±ciency gains and, through reduced average protection, compatibility with the multilateral trading system's requirements. It is also politically viable, and we demonstrate that, in the countries concerned, governments are willing to include its formation in the political agenda in spite of the fact that, in equilibrium, political contributions from producer lobbies decline after the agreement.
Keywords
Free-trade areas, political economy
Web of science
Create date
19/11/2007 10:29
Last modification date
20/08/2019 14:16
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