Preferential Trading Arrangement: Endogenous Response of the Excluded Country
United States International Trade Commission Working Paper No. 99-11-B
21 Pages Posted: 1 Dec 1999
Date Written: November 1999
Abstract
This paper presents one channel through which the creation of a Preferential Trading Arrangement (PTA) can undermine multilateral trade liberalization. Using a modified Meade model, it is shown how a PTA shrinks the export sectors in the excluded countries. This in turn leads to an expansion of those countries' import-competing and lobbying sectors. Thus, non-member countries may respond to the creation of a PTA by becoming more protectionist-and thereby undermining efforts to liberalize the multilateral trading system.
JEL Classification: F02, F13, F15
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
On the Size and Number of Regional Integration Arrangements: A Political Economy Model