Trade Blocs and Multilateral Free Trade

Endogenous Free Trade Agreements and the Multilateral Trading System

I evaluate in this paper the impact of free trade areas (FTAs) on the world trading system. I use an oligopolistic-political-economy model where the external tariffs of FTA members, as well as the decision to form FTAs, are endogenously determined. In this context, I show that FTAs are primarily beneficial to the multilateral trading system. This conclusion is based, first, upon the finding tha...

Analysis on the Relationship between Overlapping Free Trade Area and Multilateral Trade Agreement

The overlapping free trade area (FTA), as one prominent phenomenon in the development of FTA after the 1990s, has influenced the multilateral trade system (MTS) greatly. This article has proved that the special advantages of spoke countries can bring about cohesive effect on the industries through adopting the analytical method of infinitely repeated game, and the spoke countries will face a di...

Regional Trade Agreements in a Multilateral Trade Regime: An Overview

One of the most striking development in the world trading system since the mid 1990s is a surge in Regional Trade Agreements (RTAs). From about 50 till 1990, the number of RTAs notified to the World Trade Organization (WTO) has crossed 250 in 2003 and estimates indicate that over 300 RTAs will be in effect by 2007. Initially WTO encouraged the growth of RTAs because it believed that regional in...

Multilateral Trade Liberalization and Poverty Reduction

Geography, Competition, and Optimal Multilateral Trade Policy∗

How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a model of monopolistic competition in which variable markups increasing in firm size are a key source of misallocation across firms and countries. We use ‘disadvantaged’ to refer t...