Regionalism or Multilateralism? A Political Economy Choice
Electronic Access:
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Summary:
This paper provides a political economy analysis of the incentives underpinning a country's decision to enter a regional trade agreement when a multilateral free trade agreement is available, and of how entering a regional trade agreement affects the incentives to pursue multilateral trade liberalization. Taking into account the influence exerted by organized interest groups in the formation of trade agreements, we derive a formal condition under which a regional trade agreement is preferred to a multilateral one. Furthermore, we show that a country's decision to enter a regional trade agreement unambiguously undermines the incentives towards multilateral trade liberalization.
Series:
Working Paper No. 2008/065
Subject:
Multilateral trade Regional trade Trade agreements Trade liberalization Trade policy
English
Publication Date:
March 1, 2008
ISBN/ISSN:
9781451869279/1018-5941
Stock No:
WPIEA2008065
Pages:
26
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