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

Andriamananjara, Soamiely, Preferential Trading Arrangement: Endogenous Response of the Excluded Country (November 1999). United States International Trade Commission Working Paper No. 99-11-B, Available at SSRN: https://ssrn.com/abstract=195848 or http://dx.doi.org/10.2139/ssrn.195848

Soamiely Andriamananjara (Contact Author)

World Bank - World Bank Institute (WBI) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202 458 0284 (Phone)

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