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| Author: | Freund, C. |
| Title: | Multilateralism and the endogenous formation of preferential trade agreements |
| Journal: | Journal of International Economics
2000 : DEC, VOL. 52:2, p. 359-376 |
| Index terms: | INTERNATIONAL ECONOMICS MULTILATERAL TRADE TRADE AGREEMENTS |
| Language: | eng |
| Abstract: | This paper examines the interaction between preferential trade agreements (PTAs) and multilateral tariff reduction in a model of imperfect competition. A growing literature finds that the formation of PTAs alters the incentives for and the sustainability of multilateral tariff reduction. The author shows that the causation is not one-sided: multilateral tariff reduction also affects the formation of PTAs. Specifically, tariff reduction enhances the incentives to form a PTA and increases the likelihood that it is self-enforcing. |
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