Trade Regimes and Gatt: Resource Intensive vs. Knowledge-Intensive Growth
Journal of International and Comparative Economics Vol. 20, pp. 147-181, 1996
35 Pages Posted: 9 Apr 2009
Date Written: 1996
Abstract
Trading blocks can help or hinder the liberalization of world trade. A determining factor is whether trade within the block is organized around traditional comparative advantages, or around economies of scale. Regional free trade agreements such as NAFTA can he a substitutes for global free trade when they are based on traditional comparative advantages: then each regional market develops market power and incentives to impose tariffs on the rest of the world.
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